Thursday, 7th March, 2019

It was a mixed bag for NZ last week. Business confidence in the ANZ survey sank back, dashing hopes that the lift in sentiment late last year would continue into this year. And, while we expect economic growth to recover from a soft patch in 2018, continued weak business confidence flags a threat to that if it reflects indecision over hiring and capital expenditure. Friday’s manufacturing and building data will help finalise Q4 GDP forecasts, at present shaping up to be a weak 0.3% qoq. More positively, dwelling consents surged over January – aided by apartments and retirement units – to hit a 44-year annual high. Fonterra provided a higher milk price forecast range of $6.30-$6.60 for this season, but cut the share dividend. We do see this week’s dairy auction as positive, reinforcing a solid price finish for the season.