The construction and agriculture sectors saw the biggest falls in the ANZ business outlook's activity indicators in July. Photo: 123RF
Business confidence lifted slightly in July but firms remain wary as the economy cools.
The latest ANZ business outlook survey for July showed a net 13.1 percent of respondents expected the economy to get worse, an improvement of 5 points from June.
However, the more closely followed own activity measure turned flat at net 0.8 percent, as it dipped from 2.7 percent in June.
ANZ senior economist Sharon Zollner said most indicators were still off their lows of last year.
"The economy is slowing, but certainly not coming to a sudden stop. Activity indicators were a mixed bag in July, but broadly, the gains from the previous month were more or less maintained," Zollner said.
The labour market was holding up reasonably well, she said.
However, construction and agriculture sectors saw the biggest falls in activity indicators in July.
"The RBNZ [Reserve Bank] is banking on the economy rolling over rapidly; we're not convinced things are quite that weak," she said.
"Fiscal stimulus, population growth, solid household income growth, and now a bottoming housing market, are meaningful offsets to the lagged impacts of tighter monetary policy, weakening export demand, and cost-of-living pressures.
"We are forecasting a recession and associated rising unemployment - we could hardly be accused of wild optimism. But we'd characterise things as currently patchy rather than capitulating."