Local Business Confidence Dips31st October 2022
The latest North Canterbury Business Opinion Survey was released by Enterprise North Canterbury (ENC) this week and shows local confidence in the national business situation is sitting at net -12%. Whilst this figure compares well to the national statistics of net -42% optimism, it is a notable decrease on the last North Canterbury survey in April 2022 which showed net +4% optimism.
ENC Business Support Manager Miles Dalton says the decrease in confidence is of little surprise.
“It’s definitely tough times in North Canterbury at the moment with almost all indicators showing the difficulties that businesses are experiencing. With that said, North Canterbury does appear to be cushioned from the worst of world-wide influences, with our results more positive than New Zealand as a whole. Additionally, New Zealand appears to be coping better than most of the world.”
Mr Dalton puts North Canterbury’s good footing down to the region’s diversity of sectors, the strength of the local agriculture and construction sectors and a lesser reliance on international tourism than other areas of the country.
However, the increasing cost of doing business is clearly having an effect on businesses in Waimakariri and Hurunui. Eighty percent of survey respondents recorded an increase in business costs over the last six months, with 80% also seeing rises in the six months before that.
Mr Dalton says these increases are only partly reflected at the till. “North Canterbury businesses are feeling the pressure of growing inflation. This is only partially reflected in selling prices, indicating that businesses are wearing a lot of this cost in order to keep their prices competitive. As a result, businesses are seeing decreasing profit levels.”
Profitability has dropped 21% in North Canterbury in the last six months, despite an increase in sales. Additionally, 30% of businesses expect further profit decreases in the coming half-year.
On top of all of this, finding staff continues to be a consistent challenge for local businesses, with statistics showing it is harder to find staff now than at any other time since the survey began in 2013.
“Businesses are reporting that is harder to find both skilled and unskilled staff than ever before,” says Mr Dalton. “The main reason is simply that there is a supply shortage of suitable applicants. The current immigration policy settings and unaffordable wage rates that new staff are expecting are also adding to staffing issues.”
Despite these difficulties, the number of people employed in North Canterbury continued to grow this year, with net 13% of employers reporting an increase in staff numbers.
The North Canterbury Business Opinion Survey is compiled by Enterprise North Canterbury every six months. View the full survey here.