Quite a negative reading from the latest ANZ business survey (see chart from ANZ below). The headline was quite ugly - 15% of businesses now have a negative outlook on the economy - a six year low. The underlying numbers are all quite downbeat though not yet signalling a disastrous outlook. To see the really aggressive OCR forecasts eventuate (i.e., 2%) we'd need to see the outlook get a lot worse than it is now. But dairy prices look to get a lot worse - GST auction this Thursday likely to be down another 10+% - nobody is really saying what has so far been the un-sayable, but based on a Whole Milk Powder of sub $1500 per tonne and the Fonterra currency hedging policy, a payout closer to $3 than $4 is likely next year.
While this ANZ survey signals a likely weakening in the economy, this view may well accelerate to the negative as we all see more negative economic headlines. A reversal in the NZD trend seems hard to rationalise at the moment.