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Auckland Prospects "On Crest Of A Wave" But....

Press Release
Auckland Chamber of Commerce
1 June 2000

AUCKLAND SMALL-MEDIUM BUSINESS PROSPECTS
"ON CREST OF A WAVE” BUT…..

Just 6% of businesses believe the Auckland Region's business prospects will get better in the next six months compared to the previous 6 months.

This is the finding of a regular survey of Chamber of Commerce members on how they view business performance and prospects in the Auckland Region.

The survey was conducted last week, and drew 500 responses within 48 hours. Ninety-two percent (92%) of respondents indicated that they employ 50 or less people in their business.

Other main findings:

 While 27% of respondents indicated taking on increased staff in the previous six months, employment intentions to increase staff in the next six months fall to 21%;
 50% of respondents identified demand as the most significant constraint to growth, with finance at 18% the next highest factor holding back growth;
 45% of respondents indicated that they were planning to spend on new initiatives aimed at sales growth in the next 12 months, while 39% identified that they would be seeking savings by trimming overheads and operations.

Commenting, Chamber of Commerce Chief Executive Michael Barnett said that the relatively small gap between the number of businesses planning to spend on new initiatives (45%) and those seeking savings (39%) reinforced the high level of "soft" uncertainty within the business community.

"What I take from this survey is that businesses are on the crest of a wave; they want to go forward by growing their business but sense they are heading into a tougher environment brought about by unsympathetic government policies and attitudes towards business," said Mr Barnett.

"Specifically, there is an urgent need for Government to retune its agenda towards business. There is no integrated business policy apparent for growth, only ad hoc policies intended to clear away election promises on issues like employment relations, ACC and taxation."

Mr Barnett said that compared to previous Chamber surveys, this one had produced a high number of comments which revealed a litany of consistently held views:
 Businesses are not looking forward to the labour reforms as signalled in the Employment Relations Bill;
 Interest rate rises are a growing concern;
 The continuing devaluation of the NZ$ is a big concern for importers;
 Putting all these factors together, the conditions for business are getting tougher while at the same time demand for business goods and services are also dropping.

The timing of the survey was significant, said Mr Barnett. "It was undertaken just as the Prime Minister indicated she was listening to business and would take a stronger interest in the Employment Relations Bill changes."

"The Prime Ministerial concern now has to be followed through with positive action. Otherwise this survey's findings of a growing lack of confidence within business will see increased numbers of business taking decisions to limit growth and seek savings."

For more information contact: Michael Barnett, Ph: (09) 306-6100 or Mobile 021 631 150

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