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Business Confidence Drops - Purposeful Planning Required

Business Confidence Drops - Purposeful Planning Required

A business confidence survey undertaken with almost 300 businesses in the Northland and Central North Island regions last week indicates confidence peaked in February. It suggests continuing high levels of confidence but there are some warnings. Tauranga Chamber chief executive, Dave Burnett, said that increased interest rates, difficulties finding staff with the right skills and cash flow issues all seemed to be creating a drag on what most had hoped was a recovering economy.

Key Findings:

A net 57% of firms believe general situation will improve over the next six months compared to the record 69% of this view in February this year.

30% of businesses are having difficulty finding the right employees with the right skills, an increase of 5% since February.

87% of respondents expect interest rates to rise over the next 12 months.

Firms surveyed indicated that for the next three months employment expectations were down along with hours to be worked; average selling prices were up but profitability predicted to decrease next quarter.

Commenting, Chamber chief executive Dave Burnett observed that a major concern had to be that at a time of growth firms are having difficulty recruiting people with the rights skills. Knowing we have an election ahead and that further hikes in interest rates are imminent, businesses need to be purposeful in their planning and should be thinking what actions might be required to maintain current levels of growth.

“We have managed the cost- cutting cycle well but need to focus now on how we manage growth,” he said.

ENDS

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