New Zealand business confidence worsens as COVID continues to impact By Reuters

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© Reuters. FILE PHOTO: A pedestrian weariing a face mask walks past a storefront reading “Welcome Back!” as shoppers return to the Newmarket retail district in the wake of coronavirus disease (COVID-19) lockdown restrictions being eased in Auckland, New Zealand, Nov

By Lucy Craymer

WELLINGTON (Reuters) -New Zealand business confidence and demand worsened in the first quarter of this year due to the ongoing damage the COVID-19 outbreak is having on the economy, a private think tank said on Tuesday.

A net 40% of firms surveyed expected general business conditions to deteriorate compared with 28% pessimism 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, 33% expected business conditions to worsen, versus 35% pessimism recorded in the previous period. The survey’s measure of capacity utilisation rose to 97.1%, from the previous quarter’s 92.7%.

The manufacturing sector is the least pessimistic of the sectors survey but still face many challenges as Omicron’s spread impacts deliveries, NZIER said in its report.

A net 56% reported increased costs in the March quarter, it said. Overall, businesses are feeling more cautious in an environment of acute labour shortages and intense cost pressures, the report said.

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