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New Zealand QSBO for Q2 2021, business confidence headline 7% (vs. -13% prior)

The NZIER Quarterly Survey of Business Opinion (QSBO) is a closely watched NZ economic indicator

From the New Zealand Institute of Economic Research

Capacity utilisation is higher, coming in at 94.9% vs. 93.8% in Q1.

  • Net 10% of businesses expect an improvement in the economic outlook on a seasonally adjusted basis
  • from the previous quarter when net 8% of businesses had expected a deterioration
  • Firms’ own trading activity net 26% of businesses reporting increased demand in the June quarter
  • Strong construction demand is boosting confidence in the building sector
  • strong pipeline of residential, commercial and government construction work over the coming year
  • capacity pressures are becoming more acute in the construction sector … COVID-related supply chain disruptions and labour shortages …  building construction firms’ difficulty finding skilled labour at the highest for the survey’s history (going back to 1976)
  • profitability in the building sector is the strongest since December 2002
  • Service sector firms feeling more positive
  • manufacturers and retailers feeling downbeat
  • demand has been improving
  • costs have also been rising strongly partly because of the difficulty in sourcing inventory
  • net 15 percent of firms increased headcount in the June quarter, while a net 20 percent of firms are looking to increase investment in plant and machinery over the coming year. 
  • labour shortages and supply chain disruptions are leading to a further build-up of capacity pressures across the New Zealand economy. The increase in both costs and prices points to rising inflation pressures

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