Global Challenges Affect Local Businesses25th May 2022
The North Canterbury Business Opinion Survey from Enterprise North Canterbury (ENC) and the Waimakariri District Quarterly Economic Monitor from Infometrics have highlighted that significant rises in the cost of doing business and difficulties in finding staff are weighing heavily on local business operators.
Eighty percent of respondents in the Business Opinion Survey reported increased costs over the past six months which has had a flow-on effect into profitability. As a result, 44% of surveyed businesses have had to increase their prices in the past six months, with 59% expecting to do so before the end of the year.
ENC Business Support Manager Miles Dalton, who conducts the Business Opinion Survey, said the data on cost increases was significant but not surprising. “This is the highest response to increased costs that we have had since this survey began nine years ago in 2013. However, it’s not unexpected as rising costs of doing business are currently an issue worldwide due to a large number of factors including rising inflation, war in Ukraine, supply chain bottlenecks, increasing oil prices and climate impact among other things.”
Labour shortages are another problem for businesses worldwide at present, and North Canterbury is also feeling this, with survey respondents stating that it is significantly harder to find both skilled and unskilled staff than it was six months ago.
“This is a trend we are seeing the world over,” explains Miles. “Our local businesses are facing a supply shortage of suitable applicants, a lack of training amongst those that do apply, and issues with the current immigration policy settings. Despite this triple whammy, the number of people employed in North Canterbury continues to grow.”
The employment rate wasn’t the only positive to emerge from the reports, with the Infometrics Monitor showing increases in tourism expenditure, consumer spending and 10.5% GDP growth on the previous year.
Results also show that local businesses are investing more heavily in plant and equipment than at any time since 2014, which Mr Dalton says is extremely positive.
“Investing in plant and equipment is a sure sign of business confidence. This is mirrored further in the survey with +4% net business confidence among local business operators. All in all, the results show that whilst things are difficult at the moment, North Canterbury businesses are continuing to weather the storm and maintain positivity.”