New Zealand business confidence dipped this month, while remaining at an elevated level, as firms started to face slightly tighter credit conditions in an environment where low interest rates have made money cheap for an extended period.
A net 24.5 percent of firms were optimistic about the general economic outlook, down from 27.9 percent in September, while a net 38.4 percent see their own activity expanding, down from 42.4 percent, the ANZ Business Outlook shows.
A net 18.9 percent of firms found it tougher to access credit, up from 9.7 percent in September, with agriculture and construction finding it the hardest.
"A tightening in credit may dampen activity in the near term, but it's arguably in New Zealand's medium-term economic interests," ANZ Bank New Zealand chief economist Cameron Bagrie said in a note.
"New Zealand is notorious for bingeing at the top of the cycle [rapidly accumulating leverage, pushing valuations to extremes, blowing out the currency account deficit], which ultimately requires a visit from the Grim Reaper as excesses are purged."
New Zealand's economy has been beating expectations as strong tourism and record migration underpin consumer spending, while a housing shortage and the Canterbury rebuild has supported building activity.
Capacity constraints in the building sector have been pushing up construction costs, sinking several property developments in Auckland, and has prompted banks to be more circumspect in their lending to Auckland apartment projects.
The ANZ survey shows the construction sector is in good heart, with a net 37.5 percent of firms expecting commercial work to expand and 44.4 percent seeing more residential building.
Hiring intentions came back, with a net 20.7 percent expecting to take on more staff compared to 25.3 percent in September, while investment intentions slipped 1 point to 18.9 percent.
A net 30.3 percent of firms expect to be more profitable in the coming year, down from 34.4 percent a month earlier, and a net 17.6 percent want to raise prices, up from 16.8 percent in September.