While businesses remain relatively upbeat about their own prospects, they have become increasingly sceptical about the economy more broadly. This metric has now fallen to its lowest level since 2012.
Government policy is seemingly to blame, with over 50 per cent of respondents calling it the key issue facing general businesses in the next six months. The respondents were not asked to specify what they are concerned about.
“Soft businesses sentiment has been the talk of the town in recent months as headline business confidence has tumbled to levels not seen since the Global Financial Crisis,” the report stated.
“And it has certainly weighed on the [Reserve Bank of New Zealand’s] thinking… today’s data will have done little to assuage these concerns.”
While businesses are facing rising costs, they are not passing these onto the consumer, with profitability dropping over the quarter.
Citing data received so far, the report stated that there will likely be a lull in investment and hiring over the coming year.