Survey could show confidence boost

The ANZ business survey being released on Thursday could settle some scores on the economic front, as well as colour the Reserve Bank's rhetoric at next week's Monetary Policy Statement meeting.

So, too, could the various pointers on inflation during the week, along with merchandise trade, building consents and credit aggregates for the month of October.

Any bit of it could prove influential at those supposed crossroads, BNZ senior economist Craig Ebert said yesterday.

"With so many mixed messages on how the New Zealand economy is faring, we're all scratching our heads, hankering for that next piece of news."

There was a good chance that the ANZ survey (rebranded from the National Bank survey) would show increased confidence.

What was less than certain was what occurred in the ANZ's survey of own activity. What could be more instructive than the overall business activity, could be the survey's employment measures.

"Granted, these also appeared to be sound in October, overall.

"However, they were very patchy by sector. How this all balances out in November could be important following the uncertainty that was stoked by the jump in the Household Labour Force Survey measure of unemployment."

Today, the Reserve Bank would release its survey of expectations. That would divulge business and analysts' views on near-term economic growth, as measured by GDP, and employment expectations on annual inflation for a one-year and two-year period.

Also today, October merchandise trade statistics would be released with the BNZ expecting a 6% annual fall in export values and a 3% drop in imports on a year. This would be mainly due to a commodity price correction rather than any volume collapse.

While it added up to a monthly deficit of $336 million, it was less than the $536 shortfall expected by the market and slowed the worsening in the annual trade deficit, Mr Ebert said.

"We expect Friday afternoon's credit aggregates to keep picking up, with all eyes on the extent to which this is still occurring in the mortgage market against the backdrop of a reheating housing market.

"Like house price inflation, don't underestimate the degree to which the Reserve Bank is keeping a close eye on the money and credit aggregates."

While progression on that front could be interpreted as good news, it could also warn of an unhealthy resort to debt, Mr Ebert said.


Add a Comment