Business confidence remains high, with only minor changes compared to last month.
Key results, February 2025
- Business confidence: 58.4 (Prev: 54.4)
- Expectations for own trading activity: 45.1 (Prev: 45.8)
- Activity vs same month one year ago: -2.9 (Prev: 0.2)
- Inflation expectations: 2.53% (Prev: 2.67%)
- Pricing intentions: 46.2 (Prev: 45.7)
The February ANZ business outlook survey had something for everyone, with rises and falls across a range of indicators. All of the movements were relatively small, though – the general message remains that current conditions are tough but firms are hopeful about the year ahead.
General sentiment about the economy rose from 54.4 to 58.4. This measure had drifted lower in the previous three months, though it has remained at around its highest levels in more than a decade. Firms’ expectations about their own performance dipped slightly for the month, but also remain historically high. Hiring and investment expectations were up for the month.
In terms of their current performance, a net 3% of firms said that they were down on the same time a year ago. However, there are marked differences across industries. The most negative responses were from retailing (pulling back after a more upbeat Christmas / New Year period) and construction. In contrast, the agricultural sector is faring much better than a year ago, no doubt buoyed by rising export prices and an easing in input cost inflation.
The pricing gauges of the survey were mixed. Expected inflation for the year ahead fell to 2.5%, the lowest since June 2021. However, firms’ own pricing intentions continued to tick higher. Expectations for cost increases were down slightly in February, but this measure has been running higher in the last few months.
Overall, businesses remain hopeful that lower interest rates will help to revive the economy in the year ahead. We generally share that view, though we’re forecasting a return to moderate rather than above-trend growth over 2025.
