northland chamber

Northland business confidence weakens but holding up better than Auckland

Northland business confidence has dropped for the first time in 18 months amidst signs that persistent skill shortages, impact of high interest rates, a continued fall in demand and concerns over margins are starting to impact on the local economy.

However confidence in Northland about the immediate prospects for the economy continues to remain higher than in urban Auckland even though it has slipped below a number of other provincial centres.

These are among findings of regular surveys of Chamber of Commerce members conducted in metropolitan Auckland and major provincial centres in the last fortnight on how they view business prospects in the period ahead.

Main findings for Northland:

On the general business situation, just 21% of Northland businesses expect the general situation to improve over the next six months – down from 34% in June and 27% last December - and compared to 19% in urban Auckland. The 21% in the latest survey is the first time in seven successive quarters that the level of business confidence has failed to increase in regard to how Northland businesses view the economy’s overall performance.

Reinforcing the drop in confidence in Northland, 26% of Northland businesses expect business conditions to deteriorate over the next six months, compared to 24% in June and 13% in December. In contrast, 38% of Auckland businesses expect the general situation to worsen in the next six months, compared to 40% of this view in June.

However, individual businesses continue to be optimistic in terms of their own prospects. 52% of Northland businesses consider their prospects will improve over the next six months, compared to 50% in June and 48% in March, and compared with 43% in Auckland.

Further, just 8% of individual Northland businesses believe their prospects will deteriorate over the next six months, compared to the 12% of this view last June and compared with 17% in Auckland.

On interest rates, 45% of Northland businesses believe they will rise over the next 12 months compared with 88% in June and matching the 52% in Auckland of this view.

Commenting, Northland Chamber of Commerce head Jeff Smith suggested:

Part of the explanation for the drop in general optimism could relate to higher interest rates starting to bite coupled with less money available for retail.
Spending from the recent positive payout for dairy farmers may also have not yet materialised.
At the same time with 80% of businesses small-medium enterprises, and almost half this group citing finance as the most limiting factor to the ability of the business to expand, the higher interest rates, the dollar and lack of staff able to help businesses expand are a continuing concern.

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 http://www.farnorthchamber.co.nz/
You can have a say on this by going to the Northland Chamber of Commerce Feedback website on http://www.northchamber.blogspot.com/
270 Words
Jeff Smith
Northland Chamber of Commerce
09-4384771
027-4441010
ceo@northchamber.co.nz
http://www.northchamber.co.nz/