Waikato Businesses Show Resilience Amid Economic Challenges

Survey results released today show Waikato businesspeople are maintaining a level of pragmatic optimism, despite tough economic conditions and the prospect of a continued recession.

Latest findings from the Waikato Business Sentiment Survey, undertaken by regional economic development agency Te Waka, show that despite a slight decline in overall sentiment, businesses remain optimistic with 43% expressing confidence in their own performance and 48% anticipating an upturn in the regional economy over the next 12 months.

Te Waka CEO Fiona Carrick says although high costs and wage pressures are felt nationwide, the survey results highlight the resilience of the Waikato economy.

"The results show that while some sectors and districts are challenged others are seeing opportunities ahead, demonstrating Waikato’s resilient and diverse economy,” she says.

Profit expectations remain generally positive with 73% of businesses expecting profits to increase and 57% seeking to grow over the next 12 months.

Business priorities remain consistent, with key concerns echoing past surveys, including cost pressures, political uncertainty, skills shortages, and infrastructure deficits.

Waikato business priorities for regional infrastructure investment include roads (57%), health infrastructure (50%), affordable housing (48%) and renewable energy (21%).

Carrick highlights the importance of policy interventions at both central and local government levels to alleviate these pressures and foster growth.

“The Waikato business community will be looking for political decisionmakers to deliver greater certainty and implement policies to make a tangible difference to the cost pressures they are facing, addressing ongoing skills shortages and local infrastructure deficits,” Carrick says.

Te Waka’s survey deep dives into sector and district specific issues as well as those facing Māori and Pasifika businesses, providing a detailed understanding of the challenges and opportunities facing Waikato business communities.

Morrinsville Chamber of Commerce Chairperson Nigel McWilliam says, “despite economic constraints, Morrinsville is experiencing growth fuelled by residential and industrial developments, attracting new residents and businesses. The growth is evident in school enrolments and community organisations.

Infrastructure developments like the Waikato Expressway are favourably impacting the district, positioning it for resilience and adaption.”

However, some sectors are experiencing tougher conditions, for example, 46% of primary sector businesses said they experienced a revenue decline and 38% said they reduced staff numbers in the past 12 months.

“Dairy farming was effectively breakeven in the past year given cost inflation, the cost of compliance and interest costs. However, while some agribusinesses have been under severe distress, others are taking their opportunities to expand counter cyclically, supported by a strong physical farming season with rain at the right times,” McWilliam says.

Te Awamutu Chamber of Commerce Chairperson Maria Heslop also highlights several key industries in Te Awamutu that are under pressure.

“Construction, retail, manufacturing, and hospitality are encountering significant challenges. The primary culprit behind these difficulties is inflation, which is placing pressure on profit margins.

As a rural supply town, Te Awamutu is somewhat cushioned by recent improvements in the farm gate milk price, which is enabling some businesses to sustain healthy trade. However, many businesses are adopting a survival-focused approach, as they strive to weather the inflationary storm,” Heslop says.

Cambridge Chamber of Commerce CEO Kelly Bouzaid highlights the importance of education and workforce development for businesses in the Waipā District.

“Interestingly, education emerges as a key concern for businesses in Waipā, with 57% highlighting the quality of education as a top challenge facing the New Zealand economy, compared to the regional average of 36%. This focus on education reflects the district’s commitment to nurturing talent and ensuring a skilled workforce for future growth,” Bouzaid says.

At an industry level, the Waikato technology sector has a particularly strong emphasis on talent attraction, with nearly 65% of the technology businesses surveyed saying they expect to increase staff numbers in the coming 12 months.

Te Waka General Manager Economic Development Rosie Spragg says, “the Waikato technology sector continues to be a strong source of both optimism and growth prospects for the Waikato. They are backing themselves for expansion and are more likely to have increased revenue and profits in the past year, despite tough market conditions.

Skills shortages remain a key growth barrier for the technology industry and this is a key focus for Te Waka in our work with the education sector and industry to support initiatives that will grow the local technology talent pipeline.”

Spragg says the survey results show a region with a breadth of economic activity.

“We’ve seen certain sectors of our economy weather economic downturns better than others. Our diverse economy and natural asset base put the Waikato in an enviable position to recover from the recession, supported by growth in the technology sector, foundational strengths in food production, and future opportunities presented by renewable energy.”

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