- Taranaki businesses are more optimistic about New Zealand’s economic conditions, with a significant shift in sentiment compared to the last June 2023 Business Survey.
- Businesses also report a more positive outlook for both the general business situation in Taranaki and within their own industries.
- Recruitment concerns have softened however skill shortages are still present.
- Petrol prices, interest rates, and cost of materials are top concerns for many.
- 62% expect the new Government to have positive impacts on their business.
- Many hope the new Government will focus on inflation, transport infrastructure upgrades, and cost of labour.
The results of the latest 6-monthly Business Survey by Te Puna Umanga Venture Taranaki, the regional development agency, indicate that respondents are relatively optimistic regarding New Zealand’s economic conditions, this positive shift in sentiment demonstrates a rebound to confidence levels last seen in June 2021.
Of the 158 total respondents, 36% expected an improvement, up from 15% in June 2023. While 25% anticipated the general business situation in New Zealand to deteriorate, this is down significantly from 49% in the last June 2023 survey.
“It’s great to see things are slowly moving in the right direction, as business confidence is reported up around the region since our last 6-monthly survey. However, we acknowledge there is still a way to go, as businesses continue to feel the flow-on effects of the pandemic and inflationary pressures,” says Kelvin Wright, Chief Executive at Te Puna Umanga Venture Taranaki.
Respondents also expressed a more positive outlook for Taranaki and within their own industry over the next 12 months, as 35% of respondents expect the general business situation in Taranaki to improve, up from 18% in June 2023. Similarly, 33% expect conditions within their industry sector to improve, compared to 21% in the previous survey.
This positive outlook carries through to sales forecasting, with 40% expecting sales levels to improve in the short term over the next 6 months (up from 37% in June 2023), and just 14% expecting sales to deteriorate, down from 23% in June 2023.
While recruitment and staffing concerns remain with skill shortages still persistent, the price of fuel has moved up the list as a key concern for Taranaki businesses at 36%, followed by interest rates.
When comparing November 2019 survey data with the current 2023 data, interest rates reflected the largest change in business concerns, at 35% in November 2023, up from just 3% in November 2019.
“We are not surprised by these numbers as we have seen significant fluctuations in interest rates over the last four years, with large increases following the historic lows of 2021. While confidence is up, inflationary pressures are being felt widely across industry sectors particularly as surging costs of fuel and materials continue to impact businesses and households across Taranaki and Aotearoa.”
“Last week, we hosted renowned Economist, Shamubeel Eaqub in region to share his insights into what businesses could expect over the next twelve months, and interest rates were a hot topic,” adds Wright.
Eaqub explains, “While economic uncertainty had reduced, one key risk in 2024 is slower consumer spending and investing, as many mortgages are set to refinance from the historic lows we have seen over the past few years during covid, to significantly higher rates.”
This survey also included a special topic about the election outcome and likely new Government, at the time of the survey the current coalition Government had not yet been formed. Overall the majority of respondents (62%) expected the new Government to have a positive impact on their business and Taranaki industry. With just 7% expressing concerns about potential negative impacts.
Personal tax cuts, transport infrastructure upgrades, strengthening international trade connections, and restoration of 90-day trials were all rated by Taranaki businesses as having the biggest potential impacts on their own business and industry when looking at early-proposed policies of the likely new Government.
Wright comments, “Businesses were cautiously optimistic about the economic outlook under the likely new Government at the time of this survey. While the new coalition was yet to be formed, Taranaki businesses reported inflation, interest rates, cost of labour, and infrastructure as key priorities that they would like the new Government to tackle to boost their growth.”
Participants were also asked a series of special topic questions on leadership, with results identifying the top three leadership challenges as improving efficiency, navigating, and adapting to change, and developing employees.
Shifts in leadership styles following the pandemic were also reported, with more emphasis on employee wellbeing, whanaungatanga (forming and maintaining relationships and strengthening ties), and agility coming through as common themes.
“The business landscape has changed rapidly over the last four years, and business leaders have had to be agile in their approach to adapt. Looking ahead, it’s clear wellbeing and team culture is more important than ever, as many have reported fostering supportive, open, and diverse workplaces and a focus on developing their people as key areas to ensure future success,” adds Wright.
Please visit http://www.venture.org.nz/regional-intelligence/business-survey/ to view the full survey results. If you are in business and would like to be included in the next Taranaki Business Survey, you can also join the Taranaki Business Survey mailing list.
ADDITIONAL INFORMATION: The 6-monthly survey has been undertaken by Te Puna Umanga Venture Taranaki, the Regional Development Agency, since 1999. The results of this survey are of particular interest and indicate the current state of business confidence and key business indicators across the Taranaki region.
Questionnaires are sent to approximately 1,568 enterprises throughout Taranaki, the November 2023 survey had 158 respondents, with a response rate of approximately 10%.