Survey finds sharp decline in Auckland business confidence
Business confidence in Auckland has fallen sharply with the main reason being uncertain economic times.
The Auckland Chamber of Commerce runs a regular quarterly survey of more than 800 business respondents undertaken electronically, of which 97 percent were small to medium enterprises (SMEs) employing 20 people or less.
In June 2017, times were looking optimistic with 33 percent of Auckland businesses believing the economy would advance over the next six months with just 8 percent saying it would deteriorate.
Fast forward 12 months and those numbers have significantly changed. Now just 15 percent believe the economy will improve over the next six months while a whopping 44 percent believe it will deteriorate further.
According to the Auckland Chamber, there is an ongoing issue of skill shortages across the SME sector that is continuing to worsen with around 50 percent of respondents having difficulty finding staff with the right skills.
Auckland Business Chamber head Michael Barnett says the chief reason for this sharp reversal of business confidence is uncertainty around the direction the Government is taking the economy.
"The minimum wage has gone up, they've been told that if they can't afford to pay $20 an hour, in a few years they shouldn't be in business, you've got fuel going up and of course the employment changes," says Barnett.
"All of this makes small and medium businesses uncertain. I think a large part is just uncertainty in the direction of Government. And I think it's the storytelling from Government about some of the changes coming up, it's creating uncertainty in the minds of small and medium business."
When respondents were asked the reasons for their change in confidence, the most common answers included:
- uncertain union and tax environment
- lack of faster action on infrastructure and housing
- no decisions – just working groups
- lack of confidence in leadership once you get past the top
- increasing costs of fuel
- labour and wage round uncertainty.
National party leader Simon Bridges had something to say on the matter.
“With 122 working groups or reviews set up in the last eight months, it’s easy to see why businesses don’t have confidence in the Government’s ability to make decisions,” says Bridges.
“For the last few years, New Zealand’s economy has been the envy of the world. But deteriorating business confidence will mean lower investment, fewer jobs and less money for public services – undoing all the good work of hardworking Kiwis over the last decade.