Business confidence maintains rise and rise

18 November 2013

Media Release

For Immediate Release

Business confidence maintains rise and rise

Business confidence is continuing to rise despite expectations interest rates will increase early next year and a looming skills shortage.

In the last two quarters the level of business optimism has significantly increased in regard to how businesses in the Northern Region view both the economy’s overall performance and how they assess their own prospects in the period ahead.

A year ago, net of just 23% of Northern Region businesses believed the general business situation would improve in the following six months. Asked the same question last week, net of 59% of the nearly 300 Chamber of Commerce members who took part in the quarterly survey predicted the environment for doing business would improve in the next months.

Similarly, in respect of how businesses see their own business prospects over the next months, 57% (net) predict they will improve compared to just 46% of this view last November.

However, the trend of recent surveys showing an expectation that interest rates will rise in the next 12 months is maintained. A year ago, just 14% of respondents believed interest rates would increase during the following 12 months compared with 66% of this view in last week’s survey.

Reports of a continuing skills shortage are reinforced in the finding that 25% of businesses are still having difficulty finding employees with the right skills, the same percentage as a year ago.

Max Mason, Tauranga Chamber of Commerce chief executive, suggests that part of the explanation for the improved optimism could relate to the rise in local building activity, increased trading activity in the region, the expectation of increased profitability and to the nation-wide momentum of the Christchurch rebuild.

“The increase in business confidence is very positive for the region and is consistent with the recent reports of increased business and consumer confidence throughout New Zealand this quarter.”

ENDS

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