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Inflation, Labour Shortage Sends Business Confidence Near Record Low

The Central New Zealand Business Confidence Survey has seen business confidence plummet in the March quarter.

The survey found that net confidence in the national economy sat at -43%, a 57% drop from March 2021, and just short of the record lows of the early pandemic period, and height of the Global Financial Crisis.

Inflation has shot up the agenda for business, with rising prices becoming the second biggest issue, after ongoing staff shortages across every industry.

"We’re seeing the long-term consequences of the supply chain crisis, and a lack of skilled staff," said Simon Arcus, Chief Executive of Business Central. "Prices are going up across the board, and businesses are having to pass on the costs to keep their doors open."

Four out of five respondents said it was harder to find skilled staff compared to this time last year. The shortage is hitting hardest on stress levels - with three quarters of employers concerned about their staff’s workload.

"There just aren’t enough people in the country to fill the jobs available. It’s hurting our productivity and driving up costs. When half our businesses don’t have the staff to meet customer demand, that’s going to push up the cost of living for everyone," said Simon Arcus.

Respondents wanted to see more help from the government - with half saying the government had not done enough to help businesses through the omicron outbreak, and others raising concern about the

"There is too much significant legislation and significant changes being actioned, making very hard for small business to cope," said one respondent, reflecting a growing mood that government reforms were joining

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"Businesses need certainly and a roadmap to we can plan and meet demands to remain profitable. It feels like we are in a big holding pattern and waiting to pounce on the unknown," said another.

The survey was conducted over a two-week period, in the Central New Zealand region - ranging from Gisborne to Taranaki and as far south as Nelson, with 230 businesses responding.

The survey was undertaken by Business Central and the Wellington Chamber of Commerce, a membership organisation which represents business throughout the Central New Zealand region, as part of the wider BusinessNZ network.

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