Confidence turns to negative again
Business owners’ confidence in New Zealand’s economic prospects have dipped into negative territory again.
The Wellington Regional Chambers of Commerce and Business Central survey of business confidence said more businesses expect the economy to worsen than expect it to improve in the next 12 months.
A net negative 8 per cent of businesses across central New Zealand now expected the economy to worsen. That compared with a net 7 per cent expecting an upturn in the economy, recorded in the December survey.
Businesses’ confidence continues to fluctuate. The positive result from the December survey followed a net negative 12 per cent result from the survey in September.
Wellington Regional Chambers of Commerce and Business Central chief executive John Milford said the survey result reflected the uncertain business environment with confidence rebounding and then falling away again in consecutive quarters.
‘‘The new year started out positively but with the recent release from the Tax Working Group and changes to employment law coming into effect, businesses are being hit hard,’’ Milford said. ‘‘Then there are still issues to do with employing the right staff and skills, which businesses are struggling with.’’
The biggest barriers to growth that businesses and organisations were facing were finding skilled workers (23 per cent) and compliance costs and financing issues (14 per cent).
But while business-owners foresee a hard time for the economy, the majority remained confident about their own prospects. A net 38 per cent expected an uplift in their own prospects in the coming 12 months, though that was down from a net 47 per cent in December.
Business confidence tends to be volatile and tends to be much stronger when National is in Government than Labour, irrespective of how the economy is actually performing. How respondents expect their own business to perform, whether they are planning on hiring new staff or investing in new equipment or property, are seen as a much better guide to how the economy will perform.