Wellington businesses confident of own trading outlook

Wellington Chamber of Commerce
Media Statement
Monday 11th April 2016

Wellington businesses confident of own trading outlook, Chamber survey shows

Wellington region businesses remain very confident of their own immediate trading outlook, according to the latest Wellington Chamber of Commerce Business Confidence Survey, released today.

A net 59 per cent of respondents said they expect to see an improvement in their position over the next 12 months. This compares with 63 per cent in the December survey, and 43 per cent in September. Some 68 per cent expect an improvement in the next 12 months while just 9 per cent expect their position to decline.

The survey shows that a net 58 per cent are anticipating an improvement in their earnings over the same period, compared with 61 per cent in December and 35 per cent in September. Of all respondents, 67 per cent expect an improvement while just 10 per cent expect earnings to decline.

The number of businesses expecting to invest more in plant and equipment over the next 12 months has risen markedly, to a net 40 per cent from 30 per cent in December. Some 45 per cent expect to invest more and just 5 per cent expect to invest less.

Confidence in the Wellington economy matches the levels in businesses’ individual expectations, with a net 49 per cent of respondents expecting an improvement over the next 12 months, down from a net positive 52 per cent in December.

But Wellington business confidence in the national economy has dipped, with a net 27 per cent expecting improvement, compared with 44 per cent in December. Some 47 per cent expect the national economy to improve, 33 per cent expect it to remain the same, and 20 per cent are expecting a decline.

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

Intentions to hire staff remain positive, down only slightly from December. When asked what changes they expect to staffing numbers over the next three months, a net 26 per cent of businesses said they expect to be looking for more staff. This compares to 29 per cent in December. Finding skilled staff continues to be a challenge for most businesses, with just 4 per cent saying it’s easier to find skilled staff than it was 12 months ago and 39 per cent saying it’s harder. When asked what barriers were holding back their business, the No 1 issue cited was an inability to access or attract skilled staff.

More than two thirds of Chamber members believe the idea of a merger between Wellington City and Porirua City should be explored. When asked for their opinion on such a merger, 67 per cent supported it being looked at, while 23 per cent opposed this. Many comments indicated that support would be influenced by the impact on ratepayers from each city, and that they would support it provided there was a thorough cost-benefit analysis.

Some 85 per cent said they supported the convention centre project, 92 per cent said they supported movie museum project, and 75 per cent said they supported the combined project.

When asked unprompted what barriers or issues they believed were holding back the Wellington region, the most common themes were leadership (32 per cent) and increasing congestion and a lack of progress on transport infrastructure, including the Basin Reserve and Wellington airport’s runway (28%). When asked about skills shortages, IT was the most mentioned (24 per cent), followed by skills in the food and beverage industry (18 per cent) and management (17 per cent).

Chamber Chief Executive John Milford said the results were encouraging for the region’s economy.

“Even though business confidence is down a little there is still plenty to be pleased about. Having nearly two thirds of businesses expecting an improvement in their own prospects and their own earnings, and expecting to hire is a greater pointer to the prospects for the next 12 months.

“It’s certainly a different outcome to that of the recent national NZIER Quarterly Survey of Business Opinion, which had confidence at its lowest level for five years, with a net of just 6 per cent of businesses expecting a pickup in their own activity.

“In the Chamber’s survey it’s especially encouraging to see the big turnaround in the number of businesses expecting to invest more in plant and equipment. That’s a strong sign that economic conditions will continue to improve, and it matches what I’m hearing around town. It’s a continuation of the attitude that businesses ended 2015 with.

“The areas for improvement are nothing new, with skills shortages an ongoing concern. We’re working with MBIE on getting to the bottom of this issue, and it’s something I will be speaking to this year at the Higher Education Summit.

“From what I can see, the business community remains frustrated at the speed of progress on some of the big issues, and on the economy in general, and the finger continues to be pointed at the city’s leaders. So I’m not surprised that suggestions of a merger with Porirua received strong support despite the threat of rates impacts.”

Note: net percentage is the balance of sentiment: positive minus negative responses.

ends

© Scoop Media