Business confidence has fallen by 20% in the three months to September but optimism remains well up on the global average, according to the latest research from Grant Thornton's International Business Report (IBR).
Business confidence in New Zealand is well up on the global average but it has still fallen by 20% in the last quarter, according to the latest research from Grant Thornton’s International Business Report (IBR).
New Zealand business confidence in the third quarter (July-September) was at 32% compared with a global average of 3%. This compares with the second quarter figure of 52% for New Zealand and a 31% global average.
Peter Sherwin, Partner Grant Thornton New Zealand, based in Wellington, said that the pandemic collapse in business optimism during the third quarter of 2011 was felt in New Zealand, but not to the extent of other countries, especially Finland where confidence levels went from +56% to -42% in one quarter.
“Ominously, this uncertainty has also spread to key emerging markets with both China and India seeing net optimism decline by 29 percentage points. The optimism of business owners in mature markets has also been hit particularly hard. In North America optimism has dropped from 43% to 3%, in the EU from 34% to 0% and in the United Kingdom from -1% to -22%.
“Australia still sits behind New Zealand in confidence at 28%, which is actually a slight increase from 26% in the second quarter,” he said.
Mr Sherwin said that the drop in confidence in New Zealand was best illustrated in the demand for skilled workers where pressure had actually dropped.
“Between the second and third quarters there was a fall of 12% in companies who thought that a shortage of skilled workers would be a problem. This was reinforced by an 11% increase in the number of businesses struggling with falling orders. Companies with a lack of working capital also increased by 14%.
“The good news for employees is that 64% of companies surveyed intend increasing wages by inflation and 14% by amounts above inflation. In the last quarter 20% of companies increased employees compared with only 2% in the previous quarter,” he said.
Read the full report here.
