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Manukau Business Confidence Nose Dives

24 March 2004

Media Release

Manukau Business Confidence Nose Dives

A big increase in the number of Manukau businesses predicting that the general business situation will deteriorate over the next six months is reinforced by a doubling in the number saying that their own business situation will also get worse.

Skill shortages continue to be a big concern of Manukau businesses and there are signs employers are finding it harder to recruit suitable unskilled staff.

In a regular survey of Chamber of Commerce members conducted by internet a fortnight ago on how they view business prospects in the period ahead, 41% of Manukau respondents predicted that the general situation will get worse compared with just 22% in a similar survey last December.

In the latest survey, Manukau’s 41% compares with 36% across the whole region, picking a down turn. The figure for North Shore was 37% and Auckland City 33%.

Reinforcing the drop in confidence about the general situation, pessimism among Manukau businesses about their own prospects has more than doubled. Last December just 8% of Manukau businesses were picking that their own prospects would deteriorate. This is now up to 19%.

Equally the numbers of Manukau businesses picking that their own situation would improve over the next months has decreased from 63% last to December to just 40% this month.

Main findings in respect of Manukau were as follows:

In terms of the general business situation, 44% predict it will remain the same over the next six months, 41% expect it to deteriorate and just 13% to improve. In contrast, last December 43% were predicting the general business situation would remain the same over the next six months, 22% expected it to deteriorate and 35% to improve.

In terms of individual business prospects, 40% consider their prospects will improve over the next six months, 41% expect them to remain the same and 19% to deteriorate. Last December, comparable figures were 63% (improve), 29% (same) and just 8% to deteriorate.

To other questions, 38% of Manukau respondents are finding it harder to find skilled staff compared to three months ago, down from 43% in the last survey in December. In contrast, North Shore businesses are saying “it is harder to find suitable staff”, has increased from 38% in December to 41% in the latest survey. However, in Auckland City the figures are 47% (December) and 45% (March). The regional average has also dropped from 44% in December to 42%.

In respect of locating unskilled staff, 19% of Manukau businesses report it is getting harder, the same as in North Shore and 15% in Auckland. These results compare to last December’s survey of 17% (Manukau), 13% (North Shore) and 14% (Auckland) of respondents saying “recruiting unskilled staff is getting harder”.

On interest rates, an overwhelming majority, 80% predict they will rise over the next 12 months, compared to 73% across the region making this prediction. Last December, 76% of Manukau businesses were predicting interest rates to rise in the next 12 months, compared to 77% across the region.

Commenting, Chamber of Commerce Chief Executive Michael Barnett said “it is very obvious that there is increased uncertainty emerging, reflected by high expectations of rising interest rates, staff recruitment and retention difficulties of one kind or another and a tough regulatory and compliance environment”.

“This is a ‘here-and-now’ survey of what about 500 Auckland businesses said in the last few days,” said Mr. Barnett. When the survey findings are lined up against the comments provided by respondents, it is very apparent that New Zealand’s regulatory environment is proving to be a major hurdle for businesses with growth aspirations.

The comments about compliance ranged from difficulties with council red tape over renovating premises, to restraints on aquaculture, to changes in government policy involving the disabled.

Other concerns mentioned included the impact of worsening difficulties traveling around the region and influence of recent immigrants, both of which were changing the pattern of the retail market in the city center and suburbs.

“The worry in Manukau is that in previous surveys when there has been a drop in overall confidence, more than half of local businesses have continued to be optimistic that they can back the general trend. This survey has individual business confidence tracking below 50% in Manukau (40%) which is not only relatively rare but a clear indicator that the survey findings will not be good news for those looking for evidence that government policies are succeeding to build a growth-led economy”, said Mr. Barnett.

“What this survey reflects is the business case for politicians to commit to a visionary business-led growth action plan – neither the government nor Opposition have put such a package on the table,” said Mr. Barnett.


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