Business experts predict the economic outlook for the next six months, at least, will be challenging, but hope is on the horizon.
At an ABC Business Sales panel discussion at Millbrook Resort last Thursday, ABC managing director Chris Small, of Auckland, Queenstown Business Chamber of Commerce CEO Sharon Fifield and Southland MP Joseph Mooney shared their thoughts on the future business climate for the country.
When asked their view of the next 12 to 36 months, all were in agreement the rest of this year, in particular, would be tough.
Small says there’ll be a ‘‘softened environment’’ over the next six months, noting people are going from 2.5% to 6.5% for a home loan in Queenstown.
‘‘There are some pretty chunky mortgages out here and some pretty fancy properties, so that’s going to bite.’’
He believes this October’s general election will likely see some economic stimulus, by whichever party’s elected, ‘‘and hopefully some good policy’’, while immigration is starting to ramp up again, which will also help.
‘‘The third thing, which you might find a bit strange, [is] unemployment’s going to start kicking in.’’
Small says companies like Xero and Sky TV had already laid off ‘‘material numbers of workers’’ — up to 800, globally, for the former and 170 in the latter’s case — and other large institutions are looking to lay a significant number of staff off. ‘‘We are in a soft period, consumers are potentially spending less, that unemployment is actually going to help productivity, because, at the moment, there are too many Kiwis who aren’t working hard enough and productivity’s in the toilet, basically.
‘‘There are a lot of workers who have got a job because they’ve got a heartbeat, not because they know what they’re doing, because we’re so short of workers.
‘‘Unemployment is going to be good for us.’’
Fifield says the Reserve Bank’s chief economist recently spoke to Chamber members — her key takeaway was ‘‘just get through the next year’’.
‘‘This is going to be tough, but just do what you can to get through and hang in there.’’
Fifield says, tourism-wise, Queenstown’s bounced back quicker than anyone predicted — visitor spend’s pretty much at pre-Covid levels and visitor nights are also on the up, which was bucking the national trend.
‘‘We’re still a bit of an outlier here, and demand’s positive, so that’s good to see.’’
Mooney believes inflation will be with us for a while, but says there’s a dichotomy with businesses he’s spoken to of late.
While some are screaming out for staff and reporting the best summer they’ve ever had, others are looking to make workers redundant.
‘‘There are quite a few different, conflicting, waves … in the economy at the moment.
‘‘We’re definitely in for a choppy period ahead of us.’’
Business confidence down in Q’town
There’s been a marked decrease in overall confidence for Queenstown businesses in the first quarter of this year, compared to the last quarter of 2022.
Results from the latest Queenstown Business Chamber of Commerce business confidence survey show only 3% of the 80 respondents are confident in the outlook for their own business, down from 20% at the end of last year, while 56% expect conditions in New Zealand to deteriorate — in the last quarter of last year, that figure was 33%.
And a net 9% have decreased confidence in the Queenstown economy, up from 3% last year.
That, the Chamber says, highlights the rising pressure on costs, staffing and growing concerns for staff housing.
Coming out of a busy summer, activity over the next three months is expected to slow, and while the arrival of working holiday visa-holders has enabled staffing numbers to increase slightly, with costs still rising considerably due to inflationary pressures, profits are expected to decline.
Businesses were asked what factor was most limiting their ability to grow; 38% said labour — finding and employing the right staff.
Lack of accommodation was cited as a new limiting factor by 13% — the Chamber notes it’ll be interesting to track that trend over