The New Zealand Institute of Economic Research's (NZIER) first-quarter survey of business opinion returned mixed results with no specific implications for the risks around ANZ's forecast for the country's official cash rate, the bank said in a Tuesday report.
Although the survey showed a pronounced decline in business confidence, deteriorating hiring and investment intentions, and an uptick in inflation indicators, past activity held up in the quarter, and capacity indicators pointed to a marginal tightening in the output gap, ANZ said.
It noted that the survey reflected business sentiment at the initial stage of the Middle East conflict, as responses were spread across March. Reported past trading activity, the best indicator for gross domestic product in the survey, was relatively more positive.
"That said, other indicators of Q1 activity have been weaker, and the forward-looking indicators make for grim reading, so we won't be rushing to lift our GDP forecast," ANZ said.
It added that experienced employment fell in the most recent survey, while future employment intentions also slumped, suggesting that a nascent recovery in employment ground to a halt.