Wellington Employers’ Chamber of Commerce

Monday 6th July 2015

Business confidence dips in Wellington Chamber survey

Business confidence in the Wellington region's economy has dipped slightly in the latest Wellington Employers' Chamber of Commerce Business Confidence Survey.

A net 28% of business respondents said they expect the Wellington economy to improve over the next 12 months, compared to a net 28.5% in the previous survey in October.

In the survey of members, 39.8% expect the economy to be moderately or substantially better, compared with 44.3% in October, while 11.8% expect the economy to decline, compared to 15.8%. This shows more respondents feel that expectations remain the same.

Wellington region business confidence in the national economy has also dropped slightly. A net 40% of business respondents said they expected the national economy to improve, compared to 43% in October, 72% in June and 76% in March.

The survey was conducted in May over a two-week period.

There was a drop in personal business confidence when respondents were asked about their own situation, with a net 45.3% expecting an improvement, down from 58% in October. A net 45.7% expected their business earnings to improve over the next 12 months, compared to 55% in October, with 57.5% expecting an improvement (65.8%), and just 11.8% expecting earnings to be worse (10.3%).

A net 32.3% of businesses expect to invest more in plant or equipment over the next 12 months, up from 30.5% in October. Some 40.8% expect to invest more, while 8.6% expect to invest less.

Some 38% expect to hire more staff over the next few months, compared with 42% in October, while just 10.7% expect staff numbers to decrease, compared with 12%. The remaining 51% expect staff numbers to stay the same.

Shortages of skilled staff, increasing compliance costs, and poor city leadership were the top three issues cited as most affecting respondents’ businesses. Skills most in demand were IT, engineering, accounting, insurance, and finance, as well as managerial.

Other common themes included market issues such as lessening demand for goods and services, movement of business outside Wellington, and a lack of capital.

City leadership was the issue most cited as holding back the Wellington economy, followed by lack of infrastructure (airport, roading, and internet), poor confidence in the region, poor self-promotion/marketing, and poor population growth.

Wellington Employers’ Chamber of Commerce Chief Executive John Milford said the survey was in line with other national surveys which showed a drop in confidence in the national economy.

“Unfortunately, confidence seems to be dipping in line with other surveys, despite the fact that a lot of the signs for the longer term are good.

“Inflation remains low and is predicted to stay that way for some time, interest rates seem likely to go even lower, and the dollar is at lower levels, which is good for our exporters though not so for business inputs such as petrol.

“But it’s heartening that an increasing number of businesses are looking to invest more in plant and equipment over the next 12 months, and that hiring expectations are also up.

“That tells me that many businesses are confident they can improve what they can directly control, and if that’s right then it augurs well for the overall economy in the long run. Clearly, many can see confidence in their own planning and innovation which they can’t see in the wider economy.

“These results show again that Wellington businesses continue to remain alert, and reinforce the need for both local and national government to pursue the right settings to unlock Wellington’s potential. There is no shortage of opportunities and we must grab them when they present themselves, like the events business and making sure we remain business friendly so we continue to attract new companies.

“We must shore up sustained growth and continue to work on keeping down costs to doing business.”

ends

© Scoop Media