Businesses confidence is continuing to slump further into negative territory, according to a survey by Wellington Regional Chambers of Commerce and Business Central.
In the latest survey, a net negative 23 per cent of business respondents across central New Zealand expect the national economy to be worse in the next 12 months. This compares to a net negative 20 per cent in the June survey, and a net negative 8 per cent in March.
Just 22 per cent said they expected the economy to be better, while 45 per cent said it would be worse.
Expectations for the central region economy also slumped – to a net negative 0.4 per cent, from a net positive 6 per cent in June and net positive 12 per cent in March.
This lack of confidence showed through when business were asked about whether they were expecting to invest further in their own business or to buy new plant and equipment in the next year. Just a net positive 11 per cent said they would invest more, down from 17 per cent in June. A net positive 26 per cent expect their own business to improve, unchanged from June.
Chief executive John Milford said the results were in line with other surveys in recent days showing confidence was the lowest it had been in 10 years, and reflected the very uncertain trading environment which was demonstrated by the drop in GDP growth in the June quarter to just 0.5 per cent .
The quarterly survey was sent to Wellington Regional Chambers of Commerce and Business Central members across central New Zealand (from Taranaki and Gisborne down to Nelson) over two weeks in September and received 522 responses.
“Unfortunately, after a relatively positive start to the year, the trend has been downhill and it seems a long way from showing signs of turning around,” says Milford.
“I hear from businesses every day about how they are struggling with lack of clarity of the Government’s policies, the continuing increases in compliance costs, and difficulty finding the right staff with the right skills.
“Because of that, their intentions to invest in their own business continue to drop, and that is affecting not just the regional economy but the national economy as well.”
There was a slight improvement around businesses finding the right staff, though this remained the biggest issue for most. When asked unprompted about the barriers their business and organisations were facing, 20 per cent cited issues with finding the right staff and skills, compared to 25 per cent in June. Central government policy, direction and leadership was the second most quoted barrier at 18 per cent (12 per cent in June), while 14 per cent pointed to compliance costs (19 per cent in June).
Milford said it was concerning when businesses were not confident enough in their own situation to invest in new equipment.
“Many are clearly still struggling to deal with a combination of issues and the effect that low confidence is having on both the national and local economies.
“Business needs to see something that will give them confidence to invest again, but I can’t see any changes coming anytime soon to relieve staffing shortages, high compliance costs or employment law settings. “I fear it’s going to be a long, slow fix.”
The next survey will be in December.