Rising fuel costs chipped away at New Zealand business confidence in September, easing the headline index down to 52 amid ongoing global market pressures. Each month, ANZ polls 1,500 local enterprises to evaluate future economic trajectories over the coming year and publishes a corresponding report. ANZ senior economist Miles Workman noted a clear split between early and late-month responses as geopolitical tensions pushed oil prices past one hundred dollars a barrel.
Geopolitical Tensions Push Oil Past One Hundred Dollars
Global energy markets tightened through September as tension in the Strait of Hormuz drove a steady climb in crude values, which climbed back above US$100 a barrel on September 10. The Dubai spot oil price rose from US$100/bbl at the start of the month to a peak of US$128 and then down to US$111 as the reminder went out on September 22 (currently US$107.7/bbl). Simultaneously, the New Zealand dollar dropped steeply against its US counterpart, compounding local fuel expenses. Retail fuel prices have risen almost 22% in the past month according to industry website Gaspy.
Early and Late-Month Divergence in Survey Responses
The timing of business feedback revealed a distinct shift in sentiment as energy prices climbed. Roughly three-quarters of submissions came in promptly around September 1, while the remaining 25 percent arrived following a follow-up notice sent out three weeks later. Workman pointed out that submissions gathered later in the period—following another sharp surge in oil costs—displayed weaker activity metrics, whereas pricing and cost indicators remained comparable or lower. Among respondents who replied early, individual activity expectations sat at 52, compared to 36 for those who answered later in the month. The divergence was even more pronounced regarding recent business experiences, with net retail activity shifting from 17 early on to -13 subsequently.
Broad Confidence Eases While Inflation Expectations Hold Steady
Sentiment within the ANZ Business Outlook (ANZBO) poll dropped slightly during September, highlighting the jagged nature of the nation’s economic rebound. Index readings showed business sentiment at +52 for September, marking a minor drop from August’s +53.7 rating. Reported past activity fell 5 points to +11. According to the latest ANZ Business Outlook survey, headline optimism slipped by 2 points to reach 51.9 percent in September. That means optimists still comfortably outnumbered pessimists, despite near constant economic and geopolitical uncertainty. Projected individual activity among companies—typically considered a more reliable signal of future economic direction—held practically steady at 47.9 percent. But reported activity, compared with a year ago, fell to 10.8 from 16.4 in August.
“Encouragingly for the RBNZ, inflation indicators were unmoved as the month went on, but it’s very early days.”
Miles Workman, ANZ senior economist
Sector Splits and Economic Momentum
Outcomes varied significantly across industries; manufacturers again proved to be among the most optimistic, posting a confidence score of 78.7 and an individual activity expectation of 69.6. Building activity also picked up, whereas retail investment plans registered at just 2.2 alongside employment intentions of negative 10.9. Investment plans held up, while residential construction intentions improved through the month. The breakdown by sector showed manufacturing and construction heating up, but retail, services and agriculture cooling down, Workman said. Though for the latter it’s important to recall the easing comes after an excellent couple of years in terms of both production and prices for the big agriculture sectors.