Chamber of Commerce Business Confidence
One of the great things about being part of an international oprganisation is the ability to benchmark your economy against other regions. The Chamber of Commerce carries out as quarterly survey on business confidence in regions from Taupo to Northland.
Business Confidence measures how confident respondents are in the Economy and their own business prospects.
The decline in business confidence in provincial centres that hit a 12 month low in June appears to have bottomed out
Key messages from the survey that asked businesses to look ahead at conditions for the next six months showed a slight improvement in overall confidence despite a continued fall in demand, and deep concerns over margins, interest and exchange rates, and difficulties finding suitable staff.
Findings could possibly reflect anticipations of a stronger period ahead in the lead-up to Christmas fuelled by the higher returns generated by the dairy sector and relief at the Reserve Bank’s latest announcement holding interest rates for the time period ahead.
But overall confidence remains low, with only 25% of businesses expecting the economy overall to improve and just 53% expecting their own prospects to improve over the next six months, which compares to the 33% and 65% respectively of this view last December.
Main survey findings were:
· 28% of provincial firms believe conditions for business will get worse over the next six months, compared with 29% in the June survey and 13% last December. 25% now believe conditions will improve compared to 23% in June and 33% last December. In urban Auckland 38% believe conditions will get worse over the next six months, down from 40% in June. The result suggests less pessimism in provincial areas than urban Auckland about prospects in the next 6 months.
· 53% of provincial firms believe conditions for their own individual business will improve over the next six months, up from 52% in June and compared to 65% last December, while 10% believe they will get worse, compared to 13% in June and 6% last December. Comparable figures for urban Auckland were 43% expecting conditions to improve and 17% expecting conditions to get worse, reinforcing the view that provincial centre businesses are less pessimistic about the future than their urban counterparts.
· 41% of provincial firms believe it will continue to be harder to employ people with the right skills, compared with 44% of this view in June. Comparable figures in urban Auckland were 42% in both September and June surveys.
On Interest Rates
· 49% of respondents believe interest rates will rise, compared with 88% in June and just 38% last December. Urban Auckland shows a similar trend, with 52% in the September survey expecting interest rates to rise, compared with 86% in June and just 37% last December.
· 14% of provincial respondents believe interest rates will decrease in the next 12 months, compared to just 1% in June and the 5% who held this view last December. Comparable results for urban Auckland were 14% believing interest rates would fall in the September survey compared to 1% in June and 3% of this view in December.
In a comparison of responses by city and town, optimism about prospects in the next six months was highest in Rotorua with 36% of respondents expecting the general business situation to improve in the next six months, followed by Taupo (29%), Waikato (27%), Northland (21%) and Tauranga (17%) – compared with 19% for urban Auckland.
Pessimism about prospects in the next six months was highest in Tauranga at 32% followed by Taupo and Waikato 29%, Northland 26% and Rotorua 20% but all less pessimistic than Auckland at 38%.
The Northland Chamber of Commerce is the networking, education, advocacy and marketing group for Northland business, and is part of a nationwide network of 30 and a world-wide movement of 21,000 chambers. Subscription to the free fortnightly chamber e-news can be arranged on firstname.lastname@example.org. Enquiries to 09-4384771 or www.northchamber.co.nz, www.kaiparachamber.co.nz and www.farnorthchamber.co.nz
You can have a say on this by going to the Northland Chamber of Commerce Feedback website on www.northchamber.blogspot.com