northland chamber

Northland Businesses most optimistic

Business confidence in provincial centres is continuing to trend upwards in a survey of 500 business respondents undertaken electronically by the Northern Regional Chambers of Commerce late last month.

For the third successive quarter the level of business optimism in Northland, Waikato, Bay of Plenty and Rotorua has increased in both the general business situation and how respondents assess the prospects of their own business in the period ahead.

The findings are strongly consistent with trends of a similar survey of urban Auckland businesses in the second half of September.
Key messages from the survey that asked businesses to look ahead at conditions for the next six months shows that business confidence has improved from just 8% of respondents predicting the general situation to improve last December to 27% of this view in the survey conducted last week.

In respect of how respondents see their own business situation over the next six months, 60% predict they will improve compared with 38% of this view last December.
Commenting, Chamber Chief Executive Jeff Smith notes that confidence has increased in each of the last three surveys.

“This result suggests Chamber members in provincial centres as a group are defying the negative talk that is persisting in certain quarters. The evidence shows that an increasing number of businesses have ‘put negativity to one side’ and are taking their own decisions to move forward.”

At the end of the day, the strong self belief of many businesses is starting to dominate. “The survey findings show that just 20% of provincial businesses are picking the business environment to get worse in the next six months, compared with 33% who held this view at the previous survey in June and the low point of 56% in the survey last December.”

Main survey findings were:

On Confidence
• 20% of provincial firms believe conditions for business will get worse over the next six months, compared with 33% in the June survey, 36% in March and 56% last December. 27% now believe conditions will improve compared to 16% in June, 12% in March and only 8% last December. In urban Auckland 25% believe conditions will get worse over the next six months, down from 40% in June, 49% in March and 59% last December. The result suggests marginally less pessimism in provincial areas than urban Auckland about prospects in the next 6 months.
• 92% of provincial firms believe conditions for their own individual business will stay the same or improve over the next six months, up from 89% in June, 86% in March and 80% last December, while 40% believe they will stay the same or get worse, compared to 50% in June, 51% in March and 61% last December. Comparable figures for urban Auckland were 86% expecting conditions to stay the same or improve and 53% expecting conditions to stay the same or get worse, reinforcing the view that provincial centre businesses are less pessimistic about the future than their urban counterparts.
• 60% of provincial firms believe that conditions for their own business will improve over the next six months, compared to 49% in June, 48% in March and 38% in the December survey. Comparable figures for urban Auckland were 48% in the latest survey, 41% in June, 40% in March and 35% last December.
On Skills
• 41% of provincial firms believe it will continue to be harder to employ people with the right skills, compared with 39% of this view in June. Comparable figures in urban Auckland were 39% in the latest survey and 37% in the June survey.
On Interest Rates
• 39% of respondents believe interest rates will rise, compared with 43% in June, 36% in March and 85% in the December survey. Urban Auckland shows a similar trend, with 43% in the September survey expecting interest rates to rise, compared with 44% in June, 33% in March and 85% last December.
• 11% of provincial respondents believe interest rates will decrease in the next 12 months compared to 9% in June, 23% in March and just 1% who held this view last December. Comparable results for urban Auckland were 10% believing interest rates would fall in the September survey the same as in June compared to 24% in March and just 3% of this view in December.

The difficulty in recruiting skilled, qualified and/or reliable, experienced staff continues to be the main issue of concern for many businesses.

In a comparison of responses by city and town, optimism about prospects in the next six months was highest in Northland with 37% of respondents expecting the general business situation to improve in the next six months, followed by Waikato (28%), Tauranga (27%) and Rotorua (23%) – compared with 19% for urban Auckland.

Pessimism about prospects in the next six months was highest in Waikato at 28% followed by Rotorua 20%, Northland 18%, Tauranga 13% and compared to urban Auckland at 25%.

Jeff Smith notes that the critical value of this survey is that it is ‘here and now.’ The survey measures the opinion of more than 500 businesses “within the last fortnight, not last month or six weeks ago.” In contrast, other surveys tend to measure the past – they are historic.”

The Northland Chamber of Commerce is the networking, education, advocacy and marketing group for Northland business, and is part of a nationwide network of 30 and a world-wide movement of 21,000 chambers. Subscription to the free fortnightly chamber e-news can be arranged on info@northchamber.co.nz. Enquiries to 09-4384771 or www.northchamber.co.nz, www.kaiparachamber.co.nz and www.farnorthchamber.co.nz

You can have a say on this by going to the Northland Chamber of Commerce Feedback website on www.northchamber.blogspot.com

Jeff Smith
438-4771
ceo@northchamber.co.nz