Business confidence and expectations ahead of Budget 2024

As Budget Day quickly approaches, results from the latest Quarterly Canterbury Business Survey, released today, highlight rapidly diminishing business confidence across the region and the need for quick action by the Government to alleviate cost pressures.

Click here for the summary document.

Business Canterbury Chief Executive, Leeann Watson says “Business confidence has plummeted over the last three months, clearly signalling the toll that cost pressures are taking.”

“Some business confidence metrics are at the lowest levels we have seen since February 2023, with nearly 40 per cent of businesses reporting significant impacts from rising costs, and well over two-thirds bracing for continued cost increases over the next year.

“On a net basis, only 19 per cent of businesses are positive about future financial performance—a significant decline from 34 per cent in the previous quarter and 44 per cent six months ago.

“59 per cent of businesses are now worried about consumer demand—an increase from 27 per cent this time last year, likely the reason behind cashflow concerns creeping into the top five.

“In more positive news, 72% of Canterbury businesses remain confident in their ability to manage disruption, buoyed by an influx of migration and students at the University of Canterbury, a promising winter tourism season, and a resilient primary sector.

“However, it remains clear that immediate action is required by the Government to support our businesses and the wider economy, and we are calling on the Government to deliver a 2024 Budget that addresses economic issues head-on.

“The focus must be on delivering a clear roadmap away from inflationary conditions, balanced with targeted funding in critical areas that support sustainable economic growth.

“Businesses said clearly that spending on infrastructure should be the priority in Budget 2024, with healthcare, law and order, and education identified as major Budget line items they would like to see prioritised. This is what businesses believe will help get us back on track to drive our economy forward.

“Tax relief, while important, was only the fifth priority for the 400 plus businesses surveyed.

“With 65% of Canterbury businesses confident that the Government can deliver a Budget that will have a positive impact on the economy, the Government's decisions in the Budget and their subsequent action to deliver, will be vital to ensure we continue to see this level of confidence.”

Business Canterbury will be watching Budget developments closely and commenting following its release on Thursday. For more information from the Quarterly Canterbury Business Survey, including pre-budget expectations, please visit the Business Canterbury website.