Business confidence crashes 43 points in a month as ANZ warns hiring and investment will go ‘on ice’
New Zealand business confidence has crashed in spectacular fashion, with the ANZ Business Outlook for April 2026 showing a 43-point swing in a single month as firms pulled back from a recent burst of optimism and started bracing for a longer period of cost pressure and policy uncertainty.
Headline confidence fell to minus 10.6, down from plus 32.5 in March, in a result released by ANZ on 30 April. Expected own activity, which is generally a closer fit with how the economy actually performs over the year ahead, slid from 39.3 to 19.6. Pretty much every forward-looking measure in the survey moved lower at the same time. Employment intentions declined, investment intentions declined, export intentions declined, and expected profitability swung from positive into negative territory.
ANZ chief economist Sharon Zollner described the new mood as a “wall of worry” and said the impact on day-to-day business decisions would be material. “Uncertainty of the outlook will itself likely see some hiring and investment decisions put on ice until the outlook becomes clearer,” she wrote in the report’s commentary published by interest.co.nz.
Speaking to RNZ, Zollner said the slump was a “precipitous fall either way” and warned the wider damage went beyond the headline. “It’s a response to uncertainty to maybe defer risky decisions — and investing or employing someone are both risky decisions to make,” she told the public broadcaster. The construction sector, which has been bouncing along the bottom of the cycle for more than a year, was singled out for special concern. Zollner said some building consents might now be “quietly going on the shelf until this uncertainty is resolved”.
The collapse follows the global oil shock that started in late March, which has lifted petrol prices, freight costs and shipping insurance. The flow-through into business costs is now showing up clearly in the survey. Cost expectations for the next three months jumped to 4.57 percent from 2.99 percent, the highest reading since May 2023. One-year-ahead inflation expectations rose from 3.08 percent to 3.81 percent, the highest since February 2024 and well above the Reserve Bank’s 1 to 3 percent target band.
That puts the Reserve Bank in an uncomfortable spot. The central bank had been expected to keep cutting the Official Cash Rate through the middle of the year, but a fresh cost shock could pin it in place. There were, however, two pieces of news in the survey that ANZ said would soften the blow for monetary policymakers. Firms’ actual pricing intentions — what they say they will charge customers — barely moved on a net basis. And wage expectations actually eased, slipping from 2.74 percent to 2.53 percent. “Overall, the inflation news in the survey for the RBNZ was about as benign as they could reasonably hope,” Zollner wrote, arguing that contained wage settings reduce the risk of the cost shock turning into a self-reinforcing wage-price spiral.
The sector breakdown shows the pain is not evenly spread. Agriculture posted the most negative confidence reading of any sector at minus 48.6, weighed down by the rising fertiliser, fuel and freight costs Newswire reported on earlier this week. Services held up better at plus 18.6, while construction confidence somehow stayed positive at plus 19.6 even as construction employment intentions fell to minus 9, suggesting builders are hopeful about the medium term but reluctant to put new staff on right now. Manufacturing was the strongest area for jobs, with employment intentions there sitting at plus 19.
Past activity, which captures what businesses say has actually happened in the previous three months rather than what they think will happen, held up at plus 16.9. That suggests the economy has not fallen out of bed. What has changed is the willingness of firms to keep extending themselves into a future that suddenly looks a lot foggier, particularly while shipping routes through the Middle East remain disrupted and the price of imported diesel keeps moving around.
Even the headline figure had a small silver lining. The April print of minus 10.6 was actually higher than the minus 22.5 average from the late-March responses gathered immediately after the Middle East developments first hit the news, suggesting the worst of the panic may already have passed. Whether the new, more cautious mood holds, or whether confidence stages another sharp move once the oil and freight situation clarifies, will be one of the most important questions for hiring, investment, and the timing of the Reserve Bank’s next rate decision.
Has uncertainty changed how you’re running your business or making decisions about your job? Drop a comment below and let us know what you’re seeing on the ground.