MEDIA RELEASE
Canterbury business confidence up, but cost pressures rising
78% of businesses in Canterbury
expect their own earnings to be the same or better in the next 12 months.
76% expect to invest in their
business over the next 12 months.
64% intend to hire new staff
within the next three months, up from 61% last quarter.
39% expect the Canterbury
economy to worsen over the next 12 months, down from 48% in the last
quarter.
Expectations of the Canterbury economy
continue to improve, but cost pressures have taken the lead as the biggest
issue facing businesses, along with immigration settings and compliance requirements
which remain barriers to growth and productivity, according to the latest
Canterbury Employers’ Chamber of Commerce Quarterly Canterbury Business Survey
(QCBS).
Chief Executive Leeann Watson says "the
survey continues to show that Canterbury businesses are cautiously optimistic
when it comes to their own business, but remain concerned about external
challenges".
"When businesses were asked to explain
what was going well for them, good levels of staff retention and a stable
workforce was most cited, reflective of the value Canterbury employers place on
their relationship with employees.
"The confidence of our local businesses
in their own earnings projections, despite ongoing challenges is testament to
the depth and diversity of our local economy. However, a significant change
from previous surveys is the level of concern about inflationary pressure and
interest rate rises."
Nearly half of all respondents indicated cost
pressures as their biggest concern - the first time this issue has been at the top
of the list for businesses in Canterbury. 80 per cent said these pressures have
had a moderate or significant impact on their businesses.
Rising costs, whether they be from inflation
or driven by regulatory compliance, are also having a disproportionate impact
on SMEs when it comes to expected investment in their business.
For example, 72 per cent of SMEs expect to
invest in their businesses over the next 12 months, compared to 84 per cent
among larger businesses, and 55 per cent of SMEs plan to hire staff over the
next three months, compared to 81 per cent of larger businesses.
"There is clearly cause for concern
here", says Ms Watson. "We have over 40,000 SMEs in Canterbury which
are the engines of growth in our regional economy. These businesses must be
able to operate in an environment where costs can be managed and predicted, and
where there aren’t additional or counterproductive costs being added to the
mix.
"Given recent improvements in labour
market concerns, with 13 per cent of businesses now saying that they have
experienced improvement in labour markets over the past year, up from just four
per cent last quarter, if cost pressures can be reduced, businesses will
continue to gain confidence and will be more likely to invest and grow in our
communities.
"This is particularly true for
manufacturers, with 55 per cent saying they expect earnings to improve in the
next 12 months, compared to 50 per cent across all other respondents. This is a
strong signal that our biggest sector is positive about growth - which for the
benefit of the economy - we hope plays out."
Further results from the May QCBS will also be
included in The Chamber’s "Business Expectations of Government"
election year report being released on Wednesday, 5 July.
You can download a PDF snapshot of our latest survey results here .
ENDS
For more information contact:
Leeann Watson | Chief Executive, Canterbury Employers Chamber of Commerce
Email: [email protected], Mobile: 027 447 7775