North Canterbury business confidence slumps

Nicole Mathewson Reporter from Northern Outlook

By David Hill, Local Democracy Reporter

High inflation and difficulty finding staff has hit business confidence in North Canterbury.

The latest North Canterbury Business Opinion Survey, released by Enterprise North Canterbury (ENC), shows local business confidence has slumped to net -12% optimism.

While this figure compares well to the national statistics of net -42% optimism, it is a notable decrease from the last survey in April, which showed a net +4% optimism.

ENC business support manager Miles Dalton said the slump in confidence was no surprise.

‘‘It is definitely tough times in North Canterbury at the moment with almost all indicators showing the difficulties businesses are experiencing.

‘‘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.

‘‘And New Zealand appears to be coping better than most of the world.’’

Dalton puts it down to the strength of the local agriculture and construction sectors and less reliance on international tourism.

But the increasing cost of doing business is having an effect on businesses in the Waimakariri and Hurunui districts.

Eighty per cent 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.

Dalton said these increases were 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 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, while 30% of businesses expect further profit decreases in the coming half-year.

Finding staff continues to be a headache 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 it is harder to find both skilled and unskilled staff than ever before,’’ Dalton said.

‘‘The main reason is simply that there is a supply shortage of suitable applicants. The current immigration policy settings and unaffordable wage rates 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, the economic development arm of the Waimakariri and Hurunui district councils, every six months. To view the full survey visit: enterprisenorthcanterbury.co.nz/invest/surveys-and-reports.

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