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North Canterbury businesses are positive about their prospects, despite low confidence in the New Zealand business sector, according to the latest North Canterbury Business Opinion Survey.
The survey, released May 7th, covers the six months to April 2019 and shows that with GDP continuing to grow at a good pace in North Canterbury, 43% of surveyed businesses have seen increased sales and a further 24% are stable.
Miles Dalton, Business Support Manager at Enterprise North Canterbury (ENC), which conducts the survey, says the positive sales statistics are due in part to an increasingly savvy business community. “As well as population growth bringing money and business into the region, a lot of businesses are being smarter about how to attract business. Many are collaborating with other companies that would traditionally be seen as competition,” explains Miles. “Cross-referrals and working together to grow a market can be very effective when done well. Social media is also playing a part as business owners grow more savvy about tools to reach their customers.”
Population growth and increased business competition has also, however, had an effect on profit statistics, with the survey showing 44% of businesses reporting a drop in their overall profit. “The drop in profit appears to be a factor of increased costs of operation,” says Miles. “High rents, an increased minimum wage and higher costs of materials all add up, while at the same time businesses have been avoiding raising their prices due to a healthy level of competition. I think we will soon see costs of items increase, particularly in the retail and hospitality sectors which are very tight right now.”
Despite the current profit challenges, businesses reported that they are positive overall about their prospects. 72% of businesses expect profits to remain stable or to increase in the next six months, commercial consents in North Canterbury remain at approximately double the pre-earthquake level and businesses continue to invest in new plant and machinery.
The number of staff employed by local businesses has also increased, but finding suitable skilled staff in the region continues to be a difficulty. Immigration Policy has emerged as a new issue being reported by employers, with 14% of respondents citing immigration policy as a barrier to finding staff.
In summary, Miles says, “When you look at the results of the survey overall, we are seeing a very mixed bag. Businesses are nervous about the overall business situation in New Zealand, but positive about their own situation and looking towards growth.”