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Business Survey Reveals Good And Bad

20 December 2006

Business Survey Reveals Good And Bad

While there is some good news for the Government in the American Chamber of Commerce (AmCham) 2006 Business Climate Survey, there is concern that a greater number of companies are looking at either downsizing or relocating overseas.

Some 35 companies (approx. 11% of US companies operating in NZ) are looking at downsizing or relocating overseas. This is the highest number since AmCham started surveying US companies back in 2003 and an increase from only 12 companies last year.

For the second year running the country’s skills and labour shortage was the key issue facing companies doing business in New Zealand. While some have seen an improvement, over 33% of respondents felt that the situation had deteriorated in the last year. The introduction by Government of new training schemes will resolve some of the problem, more on a long-term basis, but business needs a more immediate solution. NZ Statistics recently released statistics reflecting an increase in net migration of 14,800 in the year to November, however respondents felt that the Government should be looking at a more targeted immigration policy while making New Zealand’s more attractive from an investment and tax perspective.

However it is not all bad news, as the survey of 100 American companies operating in New Zealand revealed that 73% (82% in 2005) are expecting sales growth and approximately 16% of US companies operating in NZ are looking at new investment or expansion of their existing operations.

The survey aims to identify what is preventing New Zealand from attracting further overseas investment and increasing trade, particularly with the United States.

Other issues of concern were the overheated exchange rate and the high cost of compliance and employment laws to business in New Zealand.

The Governments lack of action on tax continues to be a key issue, with 87% of respondents saying the personal taxes in this country are too high and 66% support aligning taxes with Australia.

AmCham President Alister Brown said the survey results sent a strong message that
“While US companies value New Zealand’s safe, stable environment, and our proximity to major markets in Australia and Asia, more clarity is needed about what is being done to address the labour shortage and making New Zealand more competitive in the global market. Something even more relevant given 2007 is being heralded by the Government as ‘Export Year’”.

AmCham’s 2006 Business Climate Survey of US companies was conducted by e-mail in October and November. AmCham uses the findings to direct its focus in progressing bilateral trade, commercial and business ties between New Zealand and the US. The United States is New Zealand’s second biggest trading partner with bilateral trade of NZ$9 billion annually.

The results of the 2006 survey are reported to the New Zealand Government and the business community to enable ongoing discussion and collaboration to address issues and make New Zealand a more attractive market for overseas investment.

ENDS

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