Praveen Menon

WELLINGTON, (Reuters) – New Zealand’s business confidence fell in the third quarter after the COVID-19 country lockdown hurt sentiment, a private think-tank said Tuesday.

According to the quarterly survey of business opinions (QSBO), 11% of the firms polled expected that general business conditions would worsen, as compared to 7.0% in the preceding quarter.

Seasonally adjusted data showed that 8% expects business conditions to get worse, while 9.0% expected an improvement. From the previous quarter’s 94.9 percent, the survey measured capacity utilisation at 96.1%.

NZIER stated in its report that while demand is still strong, it was affected by the COVID-19 communicable disease outbreak, which had a negative effect on business confidence.

Auckland, New Zealand’s largest city, remains under lockdown after the infective Delta variant COVID-19 arrived in the country mid-August. A few restrictions may be lifted starting Wednesday.

According to the report, “Uncertainty about the course of this latest outbreak and whether or not containment restrictions will continue to be in place appears to have eroded confidence” and caused businesses to become more cautious when considering investing.

Before the Reserve Bank of New Zealand (RBNZ), which will make its interest rate determination on Wednesday, this data provides a business outlook.

Widely expected, the central bank will increase rates for a first time in seven-years.