Auckland business confidence down

Auckland businesses are less confident now than they were three months ago.

Their confidence about the general business environment has mostly sunk from where it was three months ago, according to an Auckland Chamber of Commerce survey of 1000 business people taken last week.

While in August 39% of respondents believed the business environment would improve over the next six months, this number has now sunk to 32%. Meanwhile 18% believe the general situation will worsen, compared to 13% of this view in August.

These are small movements, but still indicate a trend in lowering business confidence.

A net 12% less now believe the business situation will improve, stay the same or deteriorate, compared to the results from three months ago.

Job market expectations have not changed. In both last week’s survey and that taken in August, 20% of businesses expected it to be challenging to find skills in the next three months. While 54% of those surveyed in August expected interest rates to rise over the next 12 months, last week’s survey saw that fall to 46%.

The findings reflect an economy that is stalled in the slow lane through a combination of circumstances, said Chamber of Commerce chief executive Michael Barnett.

“As well as coming off the back of the Rugby World Cup and in the middle of a General Election campaign, the survey result reflects the confused global environment especially in Europe.

Mr Barnett said survey results showed a degree of resilience in the SME sector. “Demand for smaller businesses employing 20 or less was less of an issue in this quarter than for larger businesses.”

But when it came to finance, the strength and resilience of larger businesses showed through. For this group finance was less of a constraint than what it is for SMEs.

Investment intentions in building improvement did not change between surveys, but there was a small lift in intentions to invest in machinery.

Also, permanent employment intentions for the next three months were down, and total hours worked were also projected to be down in the period ahead.

Costs and selling prices remained the same as in the previous survey in August as did expectations around profitability. Export sales were up marginally.

“Clearly, moving beyond this week’s general election and into the pre-Christmas period, there needs to be some reinforcement to businesses of the benefits of maintaining a sense of purpose, staying true to their vision and looking at every opportunity to innovate and achieve their growth plans.”