Latest fuel price surge dents business confidence - ANZ survey

ANZ’s latest Business Outlook survey shows rising fuel prices have dented business confidence, which had been slowly recovering.

However, so far the hit isn’t as bad as it was with the initial oil shock in April.

Topline business confidence eased two points in September to +52. Firms’ expected own activity was steady at +48. Reported past activity fell five points to +11.

ANZ senior economist Miles Workman noted that responses received later in the month after oil prices rose sharply again had lower activity indicators.

However, cost and price measures were similar or lower.

Tension in the Strait of Hormuz saw oil prices rise steadily through September, passing back through US$100 a barrel on September 10.

Meanwhile, the kiwi has fallen sharply against the US dollar, adding to the cost of fuel in local currency.

Retail fuel prices have risen almost 22% in the past month according to industry website Gaspy.

“The bumpy recovery continues,” Workman said.

This month’s survey suggested the lift in oil prices was having a renewed impact on confidence.

“But activity indicators late month were nowhere near the lows plumbed in late March and into April,” he said.

“Encouragingly for the RBNZ, inflation indicators were unmoved as the month went on, but it’s very early days.”

Inflation expectations were steady at 3.25%, cost expectations were up one point to net 82% expecting higher costs, and pricing intentions eased three points to a net 48% expecting to raise prices.

“How firms respond to the renewed uncertainty will have direct implications for how the economy rounds out 2026,” Workman said.

“There is real momentum in some sectors, but there are real headwinds too.”

The breakdown by sector showed manufacturing and construction heating up, but retail, services and agriculture cooling down, he said.

“Though for the latter it’s important to recall the easing comes after an excellent couple of years in terms of both production and prices for the big agriculture sectors.”

For the month, as a whole, the survey continued to tell a story of recovering activity, Workman said.

A good number of firms were reporting stronger activity than a year ago, he said.

Liam Dann is business editor-at-large for the ew Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.