18 July 2024
Businesses confident in Southland’s direction
An overwhelming portion of Southland businesses believe the region is heading in the right direction, but that doesn’t mean their businesses are thriving.
The Southland Business Chamber’s business confidence survey for the first quarter of 2024 showed 93% of respondents were confident in the plan for the region and 44% expected to see stronger financial performance for their businesses in the coming year.
But 71% had experienced an increase in average costs and 71% expected these to continue rising, while 38% had experienced a drop in profitability.
“The cost of doing business as a whole is rising,” chamber chief executive Sheree Carey said. “It proves that businesses are hurting.”
The survey was conducted before Rio Tinto announced that the New Zealand Aluminium Smelter at Tiwai Point would remain open for at least another 20 years.
Carey said it would be interesting to see the impact this would have on business confidence when the next survey was completed in six weeks’ time.
“We know that a lot of people are hiring because of the Tiwai announcement.”
While uncertainty around the future of the smelter — which was scheduled to shut at the end of 2024 — had left many businesses in limbo, ASB’s regional economic scoreboard recently named Southland the fastest-growing region in the country while Seek’s NZ Employment Dashboard showed Southland was the only region in the country to have an increase in job advertisements from May 2024 to June 2024.
Before the announcement, 66% of businesses expected to be hiring new staff in the next 12 months.
Carey said that number would now likely be higher.
The data also said 23% of respondents thought the Southland economy would be stronger in the next 12 months, and 79% were confident that they would be able to weather disruption.
Carey said she was surprised that the number of respondents who believed the region was on the right track — 93% — was so high, but put it down to a strong primary industry.
“We’ve still got the underpinning of our agricultural sector. Our agriculture sector keeps us afloat.”
More than 80% of survey respondents represented small to medium-sized businesses.
They identified consumer demand, inflationary pressures, compliance costs, mental health, productivity, and labour market constraints as key concerns.
A growing tourism sector and the strength of the dairy industry were seen as factors adding strength and optimism to the Southland economy.
Source: The Southland Times – 17 July 2024