Confidence in the Wellington region’s economy has taken a sharp upturn in the latest Wellington Employers’ Chamber of Commerce Business Confidence survey.
A net 27.6% of business respondents expect the economy to improve over the next 12 months, with 43.5% saying it will improve and 15.9% saying it will decline. The net 27.6% is a significant increase on the net 18% recorded in the previous survey in May.
The survey, which was released today by Chamber Chief Executive Raewyn Bleakley, was carried out between 14-21 August, spanning the series of quakes that struck near Seddon on 16 August, disrupting business and causing traffic chaos in Wellington.
When asked to list the main issues they believe are holding back the Wellington economy, the most popular reasons given were issues concerning central government – policies, cutbacks, and the Prime Minister’s comments in May that the city was dying – and city council dysfunction and lack of leadership. Infrastructure issues, mainly the airport’s inability to handle long-haul flights, and the threat of earthquake also featured prominently.
When asked to specify the limiting factors their businesses were facing, a lack of consumer demand featured particularly heavily, with many blaming the sluggish regional and national economy, and difficulty in finding and retaining good staff.
A net 46% of businesses said they expect their own business situation to improve over the next 12 months, largely unchanged from the net 45% in the last survey. Some 56% expect an improvement, 33% no improvement, and 10.5% expect their situation to worsen.
This is reflected in the findings that more businesses expect to invest and take on new staff over the coming year than they were three months ago.
A net 12% expect to increase investment in plant or equipment over the next 12 months, with 26.6% expecting an increase, 14.6% expecting a decrease, and 58.8% expecting no change. Some 28.9% expect to increase full-time staff in the next 12 months, with 12.5% expecting a reduction and 58.6% expecting no change.
Raewyn Bleakley says the sharp upturn in confidence is good news for the region because such indications are often followed by an actual boost in business activity.
“When businesses feel confident about the next 12 months, that’s usually the first indication that things are on the rise.
“When they also indicate that they expect their own business situation to improve, and say they will invest more money in plant and staff, then that’s an even better indication.
“These are promising numbers. It is an encouraging sign that the malaise that has hung over Wellington in recent times is lifting.
“I think the survey shows just how resilient Wellington businesses are. The August 16 earthquakes do not seem to have rattled the overall level of optimism at all. Things are looking up.”
