Kiwi firms 16th most confident in world
Kiwi business confidence slipped in the last quarter but local firms are still more optimistic than companies across the Tasman, according to accountancy firm Grant Thornton’s international business report.
A net 34 per cent – the proportion of businesses that are optimistic minus the proportion that are pessimistic – of New Zealand businesses had a confident outlook, down eight percentage points on last quarter and ranking the country at 16th for business confidence.
That was still well ahead of the global average of 8 per cent and Australia and the US, which both ranked at 20th on 19 per cent.
Confidence levels in New Zealand were bearing up but the report suggested firms were struggling in some areas, particularly in finding skilled staff, said Peter Sherwin, a partner at Grant Thornton New Zealand.
Half of New Zealand businesses surveyed indicated that was holding them back, up from 36 per cent a year ago.
Forty-six per cent of local businesses said regulations and red tape were also obstacles, a lift from 26 per cent a year ago.
“Also of concern was employment growth. We are almost at the bottom of the pile with a net 9 per cent of companies having increased staff numbers in the last year. This is the sixth lowest figure in the world putting us ahead of Greece, Spain, Ireland, Poland and the Netherlands and just behind Japan and Italy,” Sherwin said.
“With the rebuild in Canterbury starting to accelerate, and the need for a sustained push to develop new homes in Auckland, these figures are alarming, and that is only looking at the building sector alone,” he said.
More positively, 68 per cent of businesses said they intended to invest in plant and machinery and 38 per cent said they would beef up research and development, up 14 per cent and 16 per cent respectively over the year.
Peru was the most optimistic country at 91 per cent net confidence while Japan was the most pessimistic at negative 65 per cent – after the number of firms taking a dim outlook greatly outnumbered those seeing the glass half-full.
Singapore came in at 16 per cent, while mainland China scored 11 per cent and Britain negative 12 per cent.
Sherwin said the figures reflected the two major global economic concerns – the crisis in Europe and the slowing of the Chinese economy – with confidence in European and Asian countries suffering particularly.
“Even Australia, the lucky country, is not spared. Confidence levels over there have dropped 9 percentage points over the last year compared with 4 per cent in New Zealand.”
The report is based on interviews with 3050 businesses around the globe over August and September.