The bank wanted to wait and see the full impact of rate rises coming through – it appeared household spending was slowing – and it has still maintained an option of further monetary tightening, he said.
“The general expectation is that the New Zealand Reserve Bank will increase the official cash rate by 25 basis points this week. We have a slightly higher inflation rate (7.2 per cent) than Australia.
“The quarterly survey of business opinion showed some price pressures were easing but they are still far too high,” Goodson said.
The NZIER survey of business opinion for the first quarter showed a pickup in confidence and activity from a record low, though 61 per cent of respondents still expect conditions to deteriorate as opposed to 74 per cent in the December quarter.
ANZ Research said the shock value from the Reserve Bank’s hawkish November monetary policy statement appears to have worn off a touch, but the lift in activity indicators was not enough to challenge the narrative that broad economic momentum is softening as headwinds take a toll.
After the Reserve Bank announcement, the S&P/ASX 200 Index moved from a deficit to a gain of 0.19 per cent to 7236.4 points, and the NZ dollar increased slightly to 93.10c, up from 92.95c, against the Australian.
Mainfreight collected 45c to $70.50; Port of Tauranga improved 10c to $6.35; Synlait rebounded a further 6c or 2.79 per cent to $2.21; Fletcher Building was up 11c or 2.08 per cent to $4.52; and Vulcan Steel increased 17c or 2.08 per cent to $8.35.
Utilities investor Infratil continued its strong run since the investor day, rising 23c or 2.54 per cent to $9.28.
In the energy sector, Contact was up 8c to $7.72; Meridian increased 18c or 3.51 per cent to $5.31; and Mercury gained 3c to $6.30.
Mercury told the market it has a long-term agreement to supply renewable energy for Amazon Web Services’ Auckland data centres which open next year. Amazon will buy about half the real time output from the 103-megawatt Turitea South wind farm near Palmerston North.
Green Cross Health, owner of Unichem, Life Pharmacy and The Doctors, surged 27c or 19.85 per cent to $1.63 after paying a special dividend of 28c a share on April 28 after the sale of its community health division at the end of February.
Turners Automotive was up 5c to $3.49 after declaring a third-quarter dividend of 6c a share payable on April 17.
Gentrack rose 20c or 6.78 per cent to $3.15; Channel Infrastructure gained 5c or 3.4 per cent to $1.52; and My Food Bag was up 1.5c or 6.82 per cent to 23.5c.
It was a day for a chief financial officer merry-go-round. Haydn Marks is leaving NZ Automotive Investments, unchanged at 30c, on June 30; Tom Gordon has resigned from Sky TV, down 1c to $2.56, and leaving next month; and Dave Bennett is moving from finance to chief strategy officer with Ryman Healthcare, down 1c to $5.38.
Other retirement village operators Arvida Group was up 2c or 2.08 per cent to 98c, and Oceania Healthcare declined 2c or 2.7 per cent to 72c.
Carpet maker Bremworth gained 1.5c or 4.48 per cent to 35c after providing an update on the impact of Cyclone Gabrielle. Its Napier yarn spinning plant remains closed, but so are the Whanganui yarn spinning and Auckland plants.
Staff are still being paid, and Bremworth has negotiated an initial insurance settlement of $20m to repair the Napier plant. Bremworth said it has enough finished stock on hand to trade during this challenging period.
Stride Property, down 4c or 3.03 per cent to $1.28, told the market its office and town centre portfolio has been valued at $1.1 billion for the six months ending March 31, a decrease of $39.1m or 3.4 per cent.
Other decliners were NZME decreasing 3c or 2.78 per cent to $1.05; Briscoe Group down 8c to $4.70; Rakon falling 4c or 4.6 per cent to 83c; PGG Wrightson shedding 7c to $4.28; Steel & Tube down 4c or 3.64 per cent to $1.06; and Black Pearl Group falling 8c or 21.05 per cent to 30c.
