Auckland Business Confidence Stays Flat

Auckland Business Confidence Stays Flat

Auckland businesses are predicting the down turn in the economy that emerged earlier this year to continue over the next six months.

Ninety-two per cent (92%) of Auckland businesses surveyed late last month expect the economy to deteriorate or remain the same during the next six months.

This outcome matches the 92% of businesses surveyed in March, and just 76% last December who were expecting the economy to deteriorate or remain the same during the next six months.

Reinforcing the mood of pessimism that has emerged over the six months, 47% of respondents believe the general business situation will get worse over the next six months, compared to 46% in March but only 19% in December’s survey.

Just 7% of respondents believe the business environment will improve in the next six months, compared to 8% in March and 22% six months ago.

Reinforcing the flat economic mood around Auckland is a finding that 57% of respondents believe their own business’ situation will deteriorate or stay the same in the next six months, compared to 52% in March and 49% last December.

However, difficulties in recruiting staff have modified marginally, with 47% of businesses now saying that recruiting skilled staff is harder than three months ago compared to 54% in March and 53% in the previous two surveys (September and December last year).

Similarly, 21% of respondents now report that recruiting unskilled staff is more difficult than three months ago, compared to 25% in March and 27% last December.

Predictions of higher interest rates in the next 12 months have also been modified compared to three months ago. Eighty-six per cent (86%) of respondents expect interest rates to stay the same or rise over the next 12 months, compared to 96% making this prediction in March and 86% last December. Ten percent (10%) of respondents predict interest rates to reduce over the next 12 months, compared to just 2% making this prediction in the March survey.

These are the main findings of a regular survey of Chamber of Commerce members on how they view business prospects in the period ahead. The survey was conducted by internet. Of about 500 responses analysed, 92% indicated that they employ 100 or less people.

Commenting, Chamber of Commerce Chief Executive Michael Barnett said the outcome was predictable but disappointing.

“Given recent warning signs over interest rates and persistent difficulties businesses are having in recruiting suitable staff, the continued flatness in business confidence was predictable.

“At the same time, it is a disappointing. It shows that as a nation we are still not taking up opportunities to address core concerns of business.

“The recent Budget – delivered a month before this survey and two months after the March survey - was another missed opportunity by Government to unveil a serious strategy to empower business to lift their performance, and not accept slowing growth as inevitable.”

((ends))

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