- 78% of businesses in Canterbury expect their own earnings to be the same or better in the next 12 months.
- 76% expect to invest in their business over the next 12 months.
- 64% intend to hire new staff within the next three months, up from 61% last quarter.
- 39% expect the Canterbury economy to worsen over the next 12 months, down from 48% in the last quarter.
Expectations of the Canterbury economy continue to improve, but cost pressures have taken the lead as the biggest issue facing businesses, along with immigration settings and compliance requirements which remain barriers to growth and productivity, according to the latest Canterbury Employers’ Chamber of Commerce Quarterly Canterbury Business Survey (QCBS).
Chief Executive Leeann Watson says "the survey continues to show that Canterbury businesses are cautiously optimistic when it comes to their own business, but remain concerned about external challenges".
"When businesses were asked to explain what was going well for them, good levels of staff retention and a stable workforce was most cited, reflective of the value Canterbury employers place on their relationship with employees.
"The confidence of our local businesses in their own earnings projections, despite ongoing challenges is testament to the depth and diversity of our local economy. However, a significant change from previous surveys is the level of concern about inflationary pressure and interest rate rises."
Nearly half of all respondents indicated cost pressures as their biggest concern - the first time this issue has been at the top of the list for businesses in Canterbury. 80 per cent said these pressures have had a moderate or significant impact on their businesses.
Rising costs, whether they be from inflation or driven by regulatory compliance, are also having a disproportionate impact on SMEs when it comes to expected investment in their business.
For example, 72 per cent of SMEs expect to invest in their businesses over the next 12 months, compared to 84 per cent among larger businesses, and 55 per cent of SMEs plan to hire staff over the next three months, compared to 81 per cent of larger businesses.
"There is clearly cause for concern here", says Ms Watson. "We have over 40,000 SMEs in Canterbury which are the engines of growth in our regional economy. These businesses must be able to operate in an environment where costs can be managed and predicted, and where there aren’t additional or counterproductive costs being added to the mix.
"Given recent improvements in labour market concerns, with 13 per cent of businesses now saying that they have experienced improvement in labour markets over the past year, up from just four per cent last quarter, if cost pressures can be reduced, businesses will continue to gain confidence and will be more likely to invest and grow in our communities.
"This is particularly true for manufacturers, with 55 per cent saying they expect earnings to improve in the next 12 months, compared to 50 per cent across all other respondents. This is a strong signal that our biggest sector is positive about growth - which for the benefit of the economy - we hope plays out."
Further results from the May QCBS will also be included in The Chamber’s "Business Expectations of Government" election year report being released on Wednesday, 5 July.
You can download a PDF snapshot of our latest survey results here .