Business owners' optimism slides

JOHN ANTHONY
Last updated 14:06 16/07/2012

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Taranaki businesses are less optimistic about both New Zealand's economy and their own industries than they were a year ago, last month's Taranaki Business Survey shows.


The survey, conducted by the region's economic development agency Venture Taranaki for the past 10 years, sends questionnaires to 1000 Taranaki businesses every six months.


This time last year the survey showed that more than half of Taranaki businesses surveyed were confident New Zealand's economic conditions would improve over the next 12 months.


This has now dropped to less a third of businesses expecting New Zealand's economy to improve. About half of those surveyed expected the national economy to remain the same over the next year, while 16 per cent predicted it would deteriorate.

This is up from 5 per cent on the same time last year.
Industry conditions also painted a gloomy picture, with 19 per cent predicting worsening conditions, up from just 3 per cent this time last year.

Slightly more than half surveyed expected conditions in their industry to remain the same.
Figures for employee numbers showed the status quo, with 83 per cent of businesses expecting current staff numbers to remain the same.

Sales expectations over the next six months were largely expected to remain the same, with 54 per cent predicting no change, while 36 per cent of businesses see it improving - down from nearly 50 per cent this time last year.
Fuel, electricity and wage costs remain the top three concerns for Taranaki businesses, all gaining in concern since the last survey in December.

Interest rates are the only aspect causing less concern now than in December. The impact of the European financial situation on Taranaki businesses was also polled, with 58 per cent anticipating an indirect impact, 10 per cent a direct impact, and 32 per cent either unsure as to what the impact will be or citing no impact on their business.


The survey also sought the reactions of the region's businesses to a number of the key announcements in the 2012 Budget, delivered in late May.
The removal of tax credits for children's after school jobs was unpopular, with 36 per cent of the region's businesses strongly opposed, and 34 per cent opposed.
Deferring automatic enrolment in the KiwiSaver scheme was met with mild support from Taranaki businesses. An equal 33 per cent were neutral and 33 per cent supportive of the change.

Limiting student allowances to three years and undergraduate degrees was met with stronger support - 34 per cent were supportive, with 17 per cent very supportive.
Similarly,

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Increasing the repayment threshold on student loans was also received favourably, with 42 per cent supportive and 24 per cent very supportive.
Closing tax loopholes, both in terms of those renting out the bach or boat, and around livestock valuation, was also met with strong support - 72 per cent and 62 per cent.The highest level of support was reserved for Tax increases on cigarettes had 45 per cent very supportive of the initiative and 34 per cent supportive.

- © Fairfax NZ News

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