Requests For Redundancy And Restructuring Support Surges 50% As Economy Slows
The Employers and Manufacturers Association (EMA) says a marked increase in requests for restructuring and redundancy support from employers is further evidence that the economy is rapidly slowing.
EMA Head of Advocacy Alan McDonald says while requests for restructuring and redundancy support to the Association’s employer AdviceLine have been steadily increasing throughout the year, there has been a sharp increase over the past four months.
"In the year to November, demand for restructuring and redundancy support has increased by nearly 50 percent as businesses responded to the economic slowdown," says McDonald.
"While we need to wait and see what the official figures show tomorrow, with the release of the latest GPD numbers from Stats NZ, what we are hearing directly from our members is that the economy and business conditions are incredibly difficult.
"Inflationary pressures are still strong, and this is increasing the cost of doing business, while rising interest rates are dampening consumer demand and increasing debt servicing costs.
"As a result, many business owners have few options and are being forced to look at how they can reduce costs, including their staffing costs. This is reflected in the strong uptick in requests for support that we have seen since August.
"Unfortunately, this means that people are now starting to lose their jobs and we would expect to see the unemployment rate increase over the next few months as the economic slowdown begins to bite."
McDonald says while he expects tomorrow’s GDP figures are more than likely to show a marginal increase in economic activity, this is driven by high rates of migration.
"The reality is that while New Zealand might technically not be in a recession, for many businesses up and down the country it will feel like we are.
"Businesses will be looking to the new government to move quickly, focus on the economy and make doing business in New Zealand easier. This includes supporting efforts to bring inflation down, cutting red tape, and reducing the costs of doing business.
"Ultimately, it is the business community that will drive our economic recovery, but we need the government to back business to succeed and deliver policy that rebuilds confidence and encourages investment, innovation and entrepreneurship."