Wellington businesses remain confident of trading outlook

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Wellington Chamber of Commerce
Media Statement
Monday 4th July 2016

Wellington businesses remain confident of own trading outlook, Chamber survey shows

Business confidence in the Wellington region's economy has declined, although businesses remain confident of their own immediate trading outlook.

The latest Wellington Chamber of Commerce Business Confidence Survey, released today, shows a net 36 per cent of business respondents expect the local economy to improve over the next 12 months, a drop from the net positive 49 per cent in the previous survey in March.

But a net 57 per cent of respondents said they expect to see an improvement in their position over the next 12 months. This compares with 59 per cent in the March survey, and 63 per cent in December. Some 65 per cent expect an improvement in the next 12 months while just 8 per cent expect their position to decline.

The survey shows that a net 54 per cent are anticipating an improvement in their earnings over the same period, compared with 58 per cent in March and 61 per cent in December. Of all respondents, 63 per cent expect an improvement while just 10 per cent expect earnings to decline.

But the number of businesses expecting to invest more in plant and equipment over the next 12 months has declined slightly, to a net 33 per cent from 40 per cent in March. Some 40 per cent expect to invest more and just 8 per cent expect to invest less.

Wellington business confidence in the national economy has improved markedly, with a net 44 per cent expecting improvement, versus a net 27 per cent in March. Of respondents, 55 per cent expect the national economy to improve, 35 per cent expect things to remain the same, and 10 per cent are expecting a decline.

The survey was conducted over a two-week period in June.

Intentions to hire staff remain positive and have increased since March. When asked what changes they expect to staffing numbers over the next three months, a net 32 per cent of businesses said they expect to be looking for more staff. This compares to 26 per cent in March.

Finding skilled staff continues to be a challenge for businesses, with just 6 per cent saying it was easier to find skilled staff than it was 12 months ago. This compared with 4 per cent in March. Some 46 per cent said it was harder, compared to 39 per cent in March. When asked unprompted what barriers were holding back their business, the number one issue again cited was an inability to access or attract skilled staff.

When asked unprompted what barriers or issues they believed were holding back the Wellington economy, the most common issue cited was leadership, mentioned by 48 per cent of respondents. The second most identified issues were transport and infrastructure, mentioned by a total of 40 per cent. These were consistent with the March survey.

Wellington Chamber of Commerce Chief Executive, John Milford, said that even though overall confidence in the local economy was down slightly it was encouraging that businesses expectations of their own position remained solid.

“That’s the good news from this survey. Even though business confidence is down a little, the true test is how businesses see their own outlook 12 months out, and just short of two thirds are confident that they will be better off. That’s encouraging for future spending and for hiring.

“Having two thirds of businesses expecting to be looking for more staff bodes well for the economy in the longer term, although skills shortages remain an ongoing concern, and we continue to work alongside other organisations in the city to see how we can ease that problem.

“Issues around transport and infrastructure, be it roading or airport related, continue to be a thorn in the side of our economy and solving them must remain the top priority for local government.”

He said it was great to see that Wellington business confidence in the national economy had improved.

“A net 17 percentage point jump over March mirrors the improved sentiment seen in last week’s ANZ Bank survey. Now we’ve got to get that same confidence back into the local economy.”

ends

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