Business Confidence

The recent survey results show a marked uplift in the sentiment among Southland businesses, signalling a positive shift in the economic outlook for the region. The optimism displayed by local businesses is a strong indicator of confidence in Southland’s economic prospects. This growing confidence is an encouraging development for our local business environment.

Click here for the August 2024 summary document

The survey reveals that expectations for the Southland economy and business performance have seen a substantial improvement since the previous quarter.

Key findings from the survey include:

  • 54% of businesses expect a stronger Southland economy over the next year, up from 23% last quarter
  • 54% anticipate stronger financial performance over the next year, compared to 44% previously
  • The top four concerns for businesses are consumer confidence and demand, increased compliance costs, interest rates and inflation, and cashflow.

This renewed optimism is underpinned by several key factors, including the ongoing operation of the Tiwai Point smelter, the robustness of the dairy and agriculture sectors, and the progress of Meridian’s windfarm project. The potential for the Southern Institute of Technology to regain autonomy and the solid backing from the local community also contribute to this positive outlook.

However, challenges persist. The impact of rising costs is becoming more pronounced, affecting 42% of businesses, up from 33% in May. Although there has been some relief with a drop in inflation and a recent interest rate cut, these factors have not yet fully translated into a more favourable operating environment for businesses.

Expectations around investment and hiring have also softened, with fewer businesses planning to invest in capital or expand their workforce compared to the previous quarter.

Cash flow issues are increasingly concerning, with 33% of businesses identifying this as a critical challenge, a sharp increase from the previous 20%. The primary concerns for businesses highlighted in the survey include consumer confidence and demand (54%), increased compliance costs (35%), inflation, interest rates, and cash flow management.

While the outlook is brighter, businesses are proceeding with caution. To sustain this encouraging momentum, it’s crucial for both local and central government to prioritise initiatives that stimulate economic activity and enable businesses to concentrate on enhancing productivity, fostering innovation, and driving growth.

Streamlining regulations and reducing the burden of compliance must be at the forefront of these efforts. Businesses are navigating a dynamic and often challenging landscape, and it’s essential they have the right tools and support to adapt and thrive. We encourage any business facing difficulties in identifying a clear path forward to reach out for assistance.

Click on the links below to download previous Southland Business Confidence Insight Reports:

 

Other Resources