Con­fi­dence turns to neg­a­tive again

Manawatu Standard - - Business - Rob Stock

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.

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