New Zealand business confidence dropped in the third quarter as the latest COVID-19 lockdown in the country hurt sentiment, a private think tank said on Tuesday. A net 11% of firms surveyed expected general business conditions to deteriorate, compared with a net 7.0% positive reading in the previous quarter, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) showed. On a seasonally adjusted basis, 8% expected business conditions to worsen, versus 9.0% expecting an improvement in the previous period. The survey’s measure of capacity utilization was 96.1%, from the previous quarter’s 94.9%. Demand was still holding up, but the negative impact of the current COVID-19 community outbreak had affected business confidence, NZIER said in its report.
New Zealand’s biggest city, Auckland, continues to be in lockdown since the highly infectious Delta variant of COVID-19 entered the country in mid-August. Some restrictions will be eased from Wednesday. “Uncertainty over how the latest outbreak will evolve and how much longer containment restrictions will remain in place looks to have dented confidence and led to more caution amongst businesses towards investment,” the report said. The business outlook data comes ahead of an interest rate decision by the Reserve Bank of New Zealand (RBNZ) on Wednesday. The central bank is widely expected to hike rates for the first time in seven years.