northland chamber

Northland business outlook weakens

The latest Northland Chamber of Commerce business opinion survey points to a general deterioration in a number of important performance indicators in Northland and the Northern Region of NZ.

The Chamber’s quarterly survey provides an important snapshot of where small and medium northern region businesses think they are headed as 85% of the 500 surveyed employ 20 or fewer staff.

Northland Chamber of Commerce chief executive Jeff Smith says businesses are significantly more pessimistic than they were in December. “This has to be of concern when the Northern region (Waikato - Northland) generates more than a third of New Zealand’s productive economic activity, and small and medium businesses provide most of the engine’s cylinders.”

Mr Smith says a “stand out” survey finding was that locally in Northland 48% of the survey respondents expect the general business situation in New Zealand will deteriorate in the next six months. This is more than an 80% increase on those who thought so in December, and three times as many who were pessimistic a year ago.

In other findings, more businesses expect:

softer demand for staff over the next three months;
to make less investment in buildings and machinery over the next year;
that significantly higher costs will squeeze profitability over the next three months;
significantly less demand from New Zealand customers over the next quarter;
That interest rates will rise further over the next year.


Mr Smith says 70% of respondents now expect interest rates to rise during the next year, up from 46% in the December survey. “Coupled with this is the suggestion that mortgage rates will go still higher, despite the Reserve Bank not lifting the official cash rate. With many small businesses using borrowings secured against mortgages this will obviously have an impact.”

Mr Smith adds, “The ability of business to absorb further price increases appears to be over if, as the survey suggests, demand and turnover are headed south. Perhaps rather than pushing huge State driven capital projects it may be time to invest in the “business engine” (the Golden Goose for the last 8 years).
If not, whichever party wins the Treasury benches risks inheriting an economy in danger of turning ice cold.

Jeff Smith
CEO – Northland Chamber of Commerce

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