New Zealand's headline business confidence eased in August, according to ANZ's latest monthly Business Outlook survey, one of the country's most closely watched gauges of corporate sentiment, while a further lift in reported past activity — which ANZ describes as the most encouraging finding of the month — suggests the anticipated economic bounce-back is already underway.

Headline data:

• Business confidence: 53.7% (prior 56.1%)
• Business own activity outlook: 48.2% (prior 49.3%)

Business confidence fell 2 points to 54, and the own activity outlook eased 1 point to 48, though both measures remain at very high levels by historical standards. The figures are net balances — the percentage of respondents expecting improvement minus those expecting deterioration — so a positive reading indicates more optimists than pessimists rather than an outright share of the panel. Reported past activity, by contrast, rose 6 points to 16, driven by the large services sector. ANZ described this lift in past activity as evidence that the bounce-back in the economy is already underway, arguably a more market-relevant signal than the modest pullback in headline confidence, since it points to actual momentum building rather than just sentiment.

That reading fits with the case for the Reserve Bank of New Zealand (RBNZ) to proceed with its widely expected 25 basis point rate hike this week. New Zealand's economy has been through a stretch of weak growth following the sharp tightening cycle of recent years, and policymakers have been watching for signs that activity is recovering without reigniting inflation. In the run-up to the decision, the RBNZ Shadow Board was split, with most members backing a 25bp hike, while a BNZ preview argued that inflation and growth strength point to further RBNZ tightening. A poll showed 90% of economists expect an RBNZ hike on September 2.

Mixed inflation signals

Inflation indicators sent a mixed signal. One-year-ahead inflation expectations rose to 3.26% from 3.14%, with all sectors recording an increase, and a growing share of firms said they expect both their costs and their own prices to rise. That leaves expected inflation sitting above the RBNZ's 1–3% target band, a level the central bank has said it wants expectations anchored within. However, the size of those expected cost increases continues to shrink, easing to 2.53% from 2.70%, suggesting the pipeline pressure feeding into prices may be moderating even as more firms anticipate needing to pass costs on.

ANZ noted that oil prices are likely to remain a significant swing factor for these inflation measures, given ongoing volatility tied to the conflict in the Middle East.

Wage intentions flagged as a red flag

One indicator ANZ flagged for closer attention is wage intentions. The net percentage of firms expecting to give wage increases jumped again in August — the standout risk in the survey — a result the bank says sits awkwardly against the RBNZ's own wage forecasts, even as the size of expected wage increases itself remains modest.

ANZ said this may point to a growing mismatch between the skills firms are seeking and what they can find in the labour market, a dynamic that could add to inflationary pressure for a given rate of economic growth and could keep wage-driven inflation stickier than expected. The bank said it plans to watch this closely in coming months.

Other survey results

Elsewhere in the survey, export intentions rose sharply to 31.4 from 26.6, with manufacturing firms more upbeat than agriculture. Employment intentions climbed to 19.3, their highest level since February, led by services. Investment intentions eased slightly to 22.1, remaining strongest in agriculture and weakest in retail, while profit expectations softened to 23.1 from 28.7, with retail the most upbeat sector and agriculture the most downbeat.

ANZ's assessment

Summing up the results, ANZ said the survey paints a picture of firms keen to get on with things despite a volatile global backdrop, with cost and pricing intentions still elevated but widespread optimism that the worst of the downturn is behind the economy. The bank said it shares that optimism, arguing the lift in past activity suggests the anticipated bounce-back is already underway. Overall, the survey supports a hawkish-leaning RBNZ narrative without materially shifting the highly-priced-in case for Wednesday's hike.

The next release of the ANZ Business Outlook survey is due September 30, which will offer a first read on how firms responded to the RBNZ's decision and accompanying guidance.

Related coverage:

• Reserve Bank of New Zealand Shadow Board split, most back 25bp rate hike this week
• Preview: Inflation and growth strength point to further RBNZ tightening, BNZ says
• 90% of economists expect RBNZ hike on September 2, poll shows

Also released at the same time: Australia's Melbourne Institute inflation for August 2026 came in at 0.5% month-on-month (prior 1.0%) and 4.8% year-on-year (prior 4.0%).