Confidence has shifted gear in Auckland, with more businesses feeling that the 'days are gloom' will soon be a thing of the past.
Business confidence has taken a noticeable step up this quarter, with Auckland businesses shifting away from the deep pessimism seen through winter and showing early signs of renewed confidence in the year ahead.
Simon Bridges, CEO of the Auckland Business Chamber, said the latest November survey points to a business community that’s not out of the woods, but certainly no longer stuck in the darkest part of the forest.
“Back in August, confidence was in a real trough. What we’re seeing now is a turn, modest but meaningful,” Bridges said.
“Far fewer businesses are deeply negative about the economy, and more are landing in the middle. Added to that, a clear majority now expect the economy to improve over the next 12 months. That matters.”
Business sentiment is still cautious, but the tone has shifted.
Those rating overall confidence as negative or very negative have fallen sharply to 44 percent, down from 64 percent in August. Neutral sentiment has climbed to 39 percent, suggesting businesses are stabilising after a rough first half of the year. More than half (54 percent) now expect the New Zealand economy to improve, a 12-point lift.
Bridges said the improvement isn’t yet flowing through into strong performance, “but the platform is there.”
“Business performance remains mixed, but the trend is encouraging. Revenue expectations have strengthened, with 56 percent of businesses expecting higher revenue next year. Hiring intentions are also on the rise, 47 percent plan to take on staff, up seven points. That’s businesses backing themselves.”
But the survey also shows pressure points that continue to gnaw at business confidence.
The biggest of these remains cost escalation, with 82% expecting costs to rise in the next year.
“This is the issue that refuses to let go,” Bridges said.
“Labour costs, compliance, inputs, these are all areas where businesses still feel hemmed in.”
“There’s no real change in what’s keeping businesses awake at night. Demand is still top of the list, closely followed by productivity, cashflow, inflation and global pressures. These are persistent, not passing, challenges.”
Energy affordability and late payments are holding stubbornly at the same levels as three months ago, issues Bridges describes as “chronic irritants that chip away at resilience.”
“Businesses are doing their bit. They’re adapting, they’re hiring, and they’re investing where they can. But they need real momentum from the government too,” he said.
“Auckland businesses are feeling steadier and more optimistic about the direction of travel, but cost pressures and sluggish productivity are still biting. To keep this recovery alive, we need policy settings that back growth, back investment, and give businesses the confidence to push on.”
Bridges said the shift in sentiment is “a welcome sign,” but stresses it’s still early days.
“After a tough two years, this is the first solid sign that confidence is returning. Now it’s about ensuring that optimism isn’t short-lived.”
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