Business sentiment across New Zealand has worsened during the year’s first quarter as the impacts of COVID-19 continue to dampen economic recovery.
On a seasonally adjusted basis, a net 33 percent of businesses surveyed said they expect general business conditions to weaken over the coming months, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) reported.
“Despite the relaxation of lockdown and other restrictions since early December, many people stayed home due to infection, self-isolation or fear of infection,” NZIER said, noting that this has negatively affected demand and supply in the retail and services sectors.
The retail sector was the most pessimistic during the year’s first quarter, with a net 60 percent of retailers surveyed being downbeat, according to the report. A decline in both domestic and export demand and intensifying cost pressures drove much of this pessimism, according to NZIER.
Last year’s fourth quarter showed that the manufacturing sector was the most downbeat. It is now the least pessimistic sector, although it still faces challenges as the Omicron variant’s spread impacts deliveries and creates acute labor shortages.
Overall, business have become more cautious over increasing costs and weakening profitability, the report said.
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