Business slowdown starting to bite
On Sunday the inaugural Air Chathams flight from Auckland lands at Kapiti Coast Airport ready to start commercial flights on Monday. Early bookings have been solid and prices are very competitive. You can find all the details at www.airchathams.co.nz.
Last week I was invited to speak to about 130 people at the Kapiti Coast Chamber of Commerce business lunch welcoming Air Chathams. As I mingled it gave me the opportunity to discuss overall business confidence and the outlook for our local economy with business owners.
I got a mixed response with some saying things were tracking well and others noting the slowdown had begun.
Those more upbeat owners sighted the stimulus being created by the Otaki Expressway, RJ’s licorice expansion in Levin and the new Kapiti Police communications hub.
Others are weary of the media headlines and are noticing a slowdown of forward orders.
They realise there’s been a massive drop in business confidence which is at its lowest since the financial crisis seeing New Zealand drop from being second out of 36 countries in the OECD all the way to second to the bottom. Ouch.
Job creation has plummeted from 10,000 a month over the last couple of years to 4000 a month currently. GDP has also fallen 1 per cent which equates to $800 million less revenue for the Government. This creates all sorts of headaches for this big spending coalition Government.
While the US exchange rate at 66 cents is welcome news for Kiwi exporters, it pushes the price of imports up and this is starting to bite in many households. Petrol prices will continue to rise and fuel tax increases make it even tougher on personal budgets. With dark clouds hanging over the Horowhenua Expressway the community is waiting for the next update which is now overdue. Hopefully NZTA can confirm a preferred route shortly and then people can begin getting on with their lives. Unfortunately there’s very little money left in NZTA’s roading budget with the Government raiding $5 billion for other projects. We desperately need the funding commitment so planning can be fast tracked. Otherwise Levin will be in gridlock from 2020 onwards.
Here’s hoping Horowhenua and Ka¯ piti’s positive economic growth can continue despite the headwinds we all face. The coalition Government’s policies have had a considerable impact on business confidence and they are often the first to sense any signs of a slowdown.