Confidence of business owners falls yet again

While Auckland businesses are signaling a marginal lift in the general business environment, confidence in their own situation is continuing to fall.

These are key messages from a survey of over 750 business respondents undertaken electronically by the Auckland Chamber of Commerce last week.

Asked to look ahead at the general business environment for the next six months, 46% of respondents believe the situation will improve compared to 44% of this view in the previous survey in March.

In respect of how respondents see their own business situation over the next six months, 53% predict they will improve compared with 55% of this view in March and 59% of this view in December and 64% in September last year.

Among other findings both full time and part time employment is predicted to decrease in the period ahead compared to the recent past, and 85% of respondents are expecting interest rates to rise over the next 12 months compared to 65% of this view last December.

Commenting, Chamber chief executive Michael Barnett says the findings reflect a business community that is cautiously confident that the business environment is marginally improving but not yet to the extent that any improvement is showing up in their own business.

“In a word, confidence this year is not being translated into profits, and employment intentions are not as strong as earlier this year.”

The high number of businesses predicting interest rates to increase in coming months, coupled with the low employment intentions, suggests that businesses will remain cautious and more focused on cutting costs and surviving what they see as a continuing tough environment rather than investing and positioning for growth, said Mr Barnett.

“Unquestionably, the initiatives the Government needs to accelerate is in the area building exporting capacity and encouraging businesses to take advantage of the slowly improving global environment following the recent currency crisis,” he concluded.