Chamber ‘surprised’ by Otago survey result
OTAGO business costs are up, skilled staff are increasingly hard to come by and more than a third of surveyed Otago businesses think the economic situation will deteriorate.
The Otago Chamber of Commerce quarterly survey to December makes for sobering reading, coming on the coat tails of repetitive national surveys of low business and consumer confidence which has dogged the coalition Government for months.
Chamber chief executive Dougal McGowan said he was ‘‘slightly surprised’’ by the relatively negative survey outcome, of about 80 businesses across Otago.
‘‘I’m slightly surprised that we haven’t seen a turnaround to more positive sentiment,’’ he said in an interview.
While the fortunes of the businesses had ‘‘not got dramatically worse’’, neither had they ‘‘improved dramatically’’.
‘‘Given it’s [been] spring and the [Christmas] seasonality we’re still seeing a lot of continued uncertainty out there,’’ he said.
The survey was concluded before it was known 40 redundancies were coming at engineering specialist Milmeq in Dunedin, nor seven warehousing jobs lost from Foodstuffs in the city.
Mr McGowan said staff costs were still the highest area of concern for most respondents during the past six months — rising from 63% previously concerned to more than 72%.
‘‘They believe staff costs had the biggest effect on profitability over the past six months,’’ he said.
Average wage increases to staff during the past 12 months were 1.2% for 37.7% of businesses, while 31% had wage increases in a range of 3% to 5%.
However, for the year ahead more businesses, 37%, were expecting to offer increases in the 3% to 5% range, Mr McGowan said.
Businesses were still finding it difficult to get skilled or specialist staff, a southern issue also prevalent in other surveys of manufacturing and services sectors.
Mr McGowan said more than 41% of businesses were finding it harder than three months ago to get the skilled staff needed, while almost 40% said the problem was unchanged from three months ago.
He said the numerous groups striking in recent months was also fuelling uncertainty, as higher pay rates in other areas meant staff could be lured elsewhere.
‘‘That’s a huge loss in continuity for businesses, who then have to find more staff to train,’’ he said.
While several retailers’ spoken to by the ODT during the weekend saw a boost in trading, linked to graduations and cruise ship visits, most also expressed concerns about trading volatility, which could plunge from day to day.
Mr McGowan saw some of that volatility, noting that demand for businesses’ product was their most limiting factor.
‘‘They’re concerned how long product can be carried and when forward orders will resume,’’ Mr McGowan said.
He was predicting a ‘‘tick up’’ from the results of next year’s first quarter trading, when retailers would have the benefit of Christmas trading behind them and other sectors would reopen, and contracts and ordering resumed in the new year.