- Cameron Bagrie, ANZ Bank chief economist
Business morale among New Zealand companies slid the lowest level in six years in August. A net 29.1% of respondents in the ANZ Business Outlook survey expected business conditions to deteriorate over the course of next 12 months, compared with a net 15.3% who had predicted it to worsen in the July survey. A net 12.2% forecast their own business activity to improve in the coming year versus 19.0% in the prior survey. Confidence in the agriculture sector has been hard hit by the precipitous decline in dairy prices, with a net 75.6% of farmers surveyed pessimistic. Whole-milk powder prices have been down more than 60% since February 2014, undermining the agriculture-dependent country's economic performance. The Reserve Bank of New Zealand has considered the dairy sector as a major risk to financial stability. Prime Minister John Key, however, insists the mood of the business sector is "reasonably positive", as confidence declines to the lowest level since the height of the global financial crisis. At the same time Labour's Grant Robertson said Key was painting a "dishonest picture" as there was no sensible reading which indicated the survey was positive.
Treasury released its monthly economic indicators, estimating that the New Zealand economy grew 0.6% in the three months to June 30, lower than it had predicted in May's Budget. It estimated that growth may drop to 2% in 2015 due to sluggish domestic demand.
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