“The decline in cost and price indicators suggests further easing of inflation in the New Zealand economy. Given weak domestic demand, pricing power is particularly weak in the construction and manufacturing sectors,” NZIER said.
ANZ Research said the survey was further evidence that monetary tightening was having the claimed effect: indicators of spare capacity are deflationary and expanding, and business cost and price indicators are currently below their long-term averages.
Jeremy Sullivan, investment adviser at Hamilton Hindin Green, said weak business confidence would be good news for the central bank, with the latest data giving it the green light to cut interest rates before the end of the year.
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The domestic market is already pricing in an official rate cut in November and further cuts by February. “We're seeing deinflationary trends around the world, and if the U.S. moves (to cut interest rates), we'll be quick to follow,” Sullivan said.
Nationally, Fisher & Paykel Healthcare fell 56 cents, or 1.87 percent, to $29.39, Mainfreight lost $1.15 to $68.10, AFT Pharmaceuticals fell 14 cents, or 4.67 percent, to $2.86 and Scales Corp. lost 11 cents, or 3.14 percent, to $3.39.
Oceania Healthcare fell 2 cents, or 3.7 percent, to 52 cents, My Food Bag dropped 0.007 cents, or 4.86 percent, to 13.7 cents and Tower lost 2 cents, or 2.25 percent, to 87 cents.
In the retail sector, Hallenstein Glasson fell 17 cents, or 3.12 percent, to $5.28, Brisco Group lost 15 cents, or 3.66 percent, to $3.95 and The Warehouse lost 2 cents, or 2.04 percent, to 96 cents.
Skellerup rose 10 cents, or 2.71 per cent, to $3.79, Port of Tauranga rose nine cents, or 1.87 per cent, to $4.90, Delegatto Group jumped 41 cents, or 7.81 per cent, to $5.66, Colonial Motor Company rose 24 cents, or 3.51 per cent, to $7.08, PGG Wrightson rose eight cents, or 4.52 per cent, to $1.85 and Ventia Services added nine cents, or 2.18 per cent, to $4.21.
Big banks Westpac and ANZ rose 40 cents to $29.70 and 50 cents to $31.30 respectively.
Other gainers were Serko, up 10 cents, or 3.08 percent, to $3.35, Private Land & Property Fund, up 5.8 cents, or 4.44 percent, to $1.365, Rakon, up 2 cents, or 2.74 percent, to 75 cents, Eroad, up 9 cents, or 8.65 percent, to $1.13 and Blackpearl Group, up 3 cents, or 4.48 percent, to 70 cents.
In the property sector, Stride rose 3 cents, or 2.56 per cent, to $1.20, Kiwi rose 2 cents, or 2.44 per cent, to 84 cents and Precinct added 2 cents, or 1.76 per cent, to $1.155.
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Scott Technology Inc. rose 13 cents, or 6.5 percent, to $2.13 after it announced two new contracts worth $19 million for material handling operations in Europe. Scott will automate palletizing for four existing production lines and one new line at Danone's Polish food and beverage plant.
Scott is also increasing automation of freezing and palletizing operations at Cranswick Country Foods, a leading UK food manufacturer, as well as palletizing and packaging of shipments ready for delivery to customers.
Promethea Healthcare remained unchanged at 0.001 cents and plans to launch a $3 million recapitalization next week with 0.001 cent shares, with discretion to accept up to $1 million in oversubscriptions.
Prometheus has postponed its acquisition of Golden View and Ripponburn Lifestyle Village in Cromwell until August 14 and must meet loan conditions by July 31. BNZ is offering to refinance $13.1 million.
New Talisman Gold Mines was unchanged at 2.3 cents and returned from a trading halt after saying it had arranged an additional credit facility that provided the market with “sufficient comfort to issue a revised unqualified audit report”. The company is now planning a capital raise.
Talisman's new director, Richard Taccone, has increased the company's unsecured loan from $300,000 to $350,000, with interest at 19 percent and the final repayment due on December 31 next year.
Shareholder Hamish Brown and chairwoman Samantha Sharif have each provided unsecured loans of $850,000, with a minimum of $50,000 and a maximum of $200,000, with the same interest rate and repayment terms.