Survey: NZ businesses face uphill recovery post-pandemic
Despite some businesses noting improvements, the Mint Business Insights with Tony Alexander (pictured) reflected a generally tepid recovery in New Zealand’s business sector.
Facing a forecasted GDP contraction of -0.8% for the year ending March, the majority of businesses feel that stronger margins are still several months, if not quarters, away as they navigate a challenging economic climate.
A notable easing trend is seen in the net proportion of businesses planning to cut prices or maintain them due to persistent margin pressures and rising costs.
Political and global economic concerns
The survey highlighted growing apprehensions about the political climate in New Zealand and the worsening global economic outlook. These concerns are dampening the momentum towards increased business investment, which remains weaker than expected.
Top business worries for the year ahead
Businesses were asked about their primary concerns for the coming year, with the economy, customer demand, and compliance costs topping the list.
The feedback underscored a cautious sentiment regarding the economic recovery, which many businesses perceive as very muted.
Climate change not a major worry
Interestingly, the survey indicated that climate change remains a low priority for most businesses, despite global trends. Instead, the focus remains heavily on immediate economic pressures and operational challenges.
Investment and spending intentions
Looking ahead, businesses are more inclined to allocate resources towards retaining existing customers, developing strategy, and enhancing their social media presence.
However, there is a noticeable reluctance to expand inventory levels, reflecting uncertainty about future demand. Plans for investing in new equipment show a slight positive trend yet remain cautious.
Pricing strategies and staffing
Only a net 2% of businesses plan to increase prices, which may sound positive but reflects ongoing challenges in managing costs effectively.
In terms of staffing, the ease of finding good staff has improved as the unemployment rate rises and the flow of job applications remains high.
Future business outlook
An encouraging 47% of businesses anticipate an improvement in revenue over the next year, suggesting some optimism amid the prevailing economic uncertainty.
Additionally, businesses expect a boost in staff morale, likely influenced by the falling interest rates and potential for better economic conditions ahead, the survey found.
Download the full report here.
