Survey finds glimmer of hope in slowing economy

Over half of the 1000-plus companies surveyed by the Auckland Chamber of Commerce last week believe the general business situation in New Zealand will deteriorate further.

Nevertheless Michael Barnett, Chamber CEO, says there were glimmers of hope with those who believed the situation would improve at 14%, compared with 9% last quarter, confirmation that firms are finding it easier to attract skilled staff and almost 40% of respondents believing interest rates will fall earlier rather than later – compared with 8% last quarter.

Businesses from all industry sectors completed the survey over a 48-hour period, providing an up-to-date snapshot of what’s front of mind for Auckland companies.

Survey respondents confirmed a slowing economy, with 50% citing demand as the factor most limiting their ability to expand; 70% expect costs to continue rise, only 34% believe they will be able to increase prices and 46% expect profitability to be down.

Investment intentions continued to fall, with over a quarter of those surveyed indicating reduced intention to invest in buildings and over a third indicating reduced investment in machinery.

“While the survey confirmed a lot of what we already know it’s obvious that while there is a slight lift in confidence, firms are generally pinning improved fortunes on an early interest rate drop – something that is obviously out of their control,” says Barnett.