NZ business confidence bounces in May, cost pressures persist
New Zealand business confidence rose 21 points to +10 in May, but cost expectations remain near record highs and retail activity is still contracting.
New Zealand business confidence improved in May, but the recovery remains uneven and cost pressures continue to weigh on the outlook.
The ANZ Business Outlook survey showed confidence rising 21 points to +10 in May, a partial rebound from the lows seen after the Middle East conflict disrupted global supply chains. However, the reading remains well below pre-conflict levels, and cost expectations are near record highs. Retail activity is still contracting, and construction remains weak, suggesting the recovery is not broad-based.
For interest rate traders, the data presents a mixed picture. The Reserve Bank of New Zealand (RBNZ) has been on hold, balancing sticky inflation against a weakening economy. The persistent cost pressures may keep the RBNZ cautious, delaying any rate cuts. NowPrice live rates and charts show how the market is pricing RBNZ policy expectations, with the OIS curve reflecting a slower easing cycle.
Looking ahead, the key focus will be on whether the recovery broadens to retail and construction. If cost pressures ease and activity picks up, the RBNZ could gain room to cut rates later this year. However, if the Middle East situation worsens, the cost squeeze may persist, keeping the RBNZ on hold. Traders should watch the next ANZ survey and inflation data for further clues.