Insights on business trends
In his latest survey, economist Tony Alexander revealed that a record net 17% of businesses no longer plan to raise prices in the coming year.
“Concerns about the economy, customer demand, and interest rates continue to track at high levels,” Alexander said.
Top business concerns
Businesses continue to worry about the general economy, customer demand, and interest rates, according to Mint! Business Insights with Tony Alexander.
Despite recent Reserve Bank commentary, businesses remain deeply concerned about interest rates.
“Concerns about customer demand have risen from early this year but there are signs of a plateau being reached,” Alexander said.
Shifting labour market dynamics
Labour market concerns are decreasing, showing a shift in bargaining power from employees to employers.
“Staff availability shifted towards the positive for businesses late last year and that availability overall remains good,” Alexander said.
Spending plans for 2024
Businesses plan to allocate more resources towards strategy development, customer retention, and social media presence. Conversely, spending on climate change mitigation and recruitment is being cut back.
“Plans for spending on strategy development and customer retention have been consistently strong since early last year,” Alexander said.
Revenue and staff morale outlook
A net 25% of businesses expect revenue to deteriorate over the coming year, reflecting a significant downturn. Furthermore, a net 13% of respondents anticipate a decline in staff morale due to the weakening labour market.
“The improvement in this measure early this year is well on the way to being wiped out,” Alexander said.
Implications for monetary policy
The shift towards not raising prices suggests potential changes in monetary policy.
“It is increasingly valid to think in terms of the Reserve Bank cutting the official cash rate from 5.5% well ahead of its planned date of about August last year,” Alexander said.
Download the Business Insights Report for July here.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
