Confidence in New Zealand businesses increased to 47.8%, while activity decreased to 40.6%
by VT Markets
/
Jul 30, 2025
New Zealand’s business confidence rose to 47.8% in July, up from 46.3% in June. However, business activity dipped slightly to 40.6%, down from 40.9%.
Agriculture saw growth, but construction and retail deteriorated further. Indicators for future activity showed little change during the month.
Business Confidence vs. Activity
The increase in business confidence to 47.8% might be misleading. The more important figure, business activity, actually decreased, indicating that how businesses feel doesn’t reflect their actual performance. This suggests the economy is stagnant without clear progress.
This mixed data means the Reserve Bank of New Zealand is likely to keep the cash rate at 5.50% for now. They face weak demand locally and persistent inflation, which suggests the New Zealand dollar will stay in a narrow range. We see limited chances for significant currency movement in the coming weeks.
Sector Differences and Trading Opportunities
The key takeaway is the stark divide within the economy. Notably, agriculture is “storming ahead,” while construction and retail are facing a “renewed slump.” This difference between sectors offers clearer trading opportunities than betting on the economy as a whole.
To take advantage of this, we are considering call options on agriculture-related companies. The recent 3.1% rise in the Global Dairy Trade auction supports the strength of this sector, providing a direct way to trade the positive trend mentioned in the survey.
On the flip side, we are looking at put options for major retail and construction firms. Official data shows retail sales volumes fell by 1.2% last quarter and building consents are also declining. This confirms the reported slump, offering a clear opportunity to bet against these sectors.
Create your live VT Markets account and start trading now.
by VT Markets
Jul 30, 2025
Insights 
VT 
