Skills shortages and uncertainty continue to hit business confidence
Business confidence across central New Zealand is being affected by difficulties finding the right staff and continuing uncertainty about Government policy, according to a survey by the Wellington Regional Chambers of Commerce and Business Central.
"Overall, our survey found a net 12 per cent of businesses are pessimistic about New Zealand’s economic performance in the year ahead" says Wellington Chamber and Business Central Chief Executive John Milford.
Some 40 per cent of business respondents are pessimistic, while just 28 per cent are positive. Some 32 per cent said economic performance will remain the same.
A number of improvements were made to this quarter’s survey, including expanding the coverage to include more regions and increasing the number of respondents. The survey now covers the Business Central area, which includes Gisborne, New Plymouth, Hawke’s Bay, Manawatu, and Nelson. It also covers the Wellington Regional Chambers of Commerce, which include Kapiti, Hutt Valley, Porirua, Wairarapa, and Wellington. Previous surveys covered just the Regional Chambers.
Some 829 businesses responded to the latest survey.
Mr Milford says it’s clear from the survey that businesses are positive about their own business and the regional economy improving over the next 12 months, but they are pessimistic about New Zealand’s overall economic performance.
The survey included specific questions designed to understand why businesses hold the views they do and what factors are driving their responses.
"Respondents highlight areas of positive action by the Government - particularly in housing, environment, and health - that will benefit the country’s economic performance, but they also point out their concerns.
"Three key drivers stand out. Businesses say they are most concerned about uncertainty around the Government’s policies, finding the right staff, and future employment law changes.
"These concerns are a further wake-up call for the Government. Businesses are not in a confidence rut simply because they don’t like the Government. They hold genuine concerns about its policy direction.
"When asked about the main barriers to improving general business confidence, 62 per cent of respondents cite general uncertainty around the impact of the Government’s policies.
"In light of this ongoing issue, I urge the Labour-led Government to provide certainty and clarity on their economic plan.
"Some 58 per cent of businesses we asked think the Government has no plan of action to raise New Zealand’s economic performance, while 50 per cent are unsure whether the newly announced Business Advisory Council will help that."
The survey recorded positive sentiment regarding respondents’ expectations for their own businesses over the next 12 months (+38 per cent), including earnings (+34 per cent) and investment (+19 per cent). However, on the key headline indicator of respondents’ expectations for the New Zealand economy, the result is -12 per cent. On the other hand, regional economic confidence is in positive territory at +11 per cent.
Respondents were asked to indicate the top three major barriers to improving business confidence. They point to general uncertainty around the impact of the Government’s policies (62 per cent), labour shortages and finding the right staff (47 per cent), and concern around future industrial relations changes (45 per cent). Only 3 per cent of respondents said there are no barriers to improving confidence.
When asked to pick out areas where the Government is providing beneficial policies for the economy, businesses choose housing (29 per cent), environment (22 per cent) and health (19 per cent). Just 8 per cent think employment relations policy is beneficial, while 5 per cent choose tax policy.
Some 58 per cent think the Government does not have a coordinated plan of action that is focused on raising New Zealand’s economic performance, compared to 17 per cent who do. And only 12 per cent believe the Business Advisory Council will help improve general business confidence, compared to 37 per cent who believe it will not help. Half of respondents are unsure.
The Wellington Regional Chambers of Commerce & Business Central Business Confidence Survey was conducted over a 17-day period between Wednesday 5 September and Friday 21 September. The next survey will take place in December.