The latest quarterly survey from Business South has shown that confidence has declined among southern businesses.
According to the survey, which covers the regions from Waitaki to Bluff, on a net basis only 11% of southern businesses were positive about future financial performances — a “significant decline” from 32% in the past quarter and from 35% six months ago.
A total of 33% of southern businesses expected the economy to be stronger in 12 months’ time and 73% expected costs to continue rising over that time, the survey stated.
The Scottish Shop co-owner Garth Hannaford said the figure was “shocking” and “very concerning” but did not surprise him at all.
Mr Hannaford, who also co-owns the New Zealand Shop in George St, said the Scottish Shop was having its “worst year ever”.
The sentiment at the shop was to “batten down the hatches” and reduce spending.
All of their goods were imported from Scotland, and they could not widen their range of goods to bring in a different clientele, he said.
“It’s very difficult as to what we can do; we’ve got to just watch costs.
“It’s kind of a destination store, I guess — unless people are wanting to go to that destination; we’re pushing it up hill.”
The survey said inflationary pressures and interest rates were “still major challenges” for businesses, with 50% reporting “significant impacts” from rising costs and nearly three-quarters expecting them over the next 12 months.
Business South chief executive Mike Collins said the drop in business confidence came as people began to realise it would take time for the economy to improve.
While it was not a huge surprise, the figure was “definitely lower” than he had expected.
Hospitality New Zealand Otago branch president Mark Scully said he was surprised the drop in confidence was that big, but things were “certainly grim”.
The hospitality industry was “disarrayed” during the Covid-19 pandemic and there was no doubt things were at their grimmest now, he said.
Rising prices were the issue, he said.
“They say that food prices are coming down at the supermarket — we certainly haven’t seen it from our suppliers yet.”
The government was working hard to fix the economy, but there was a lag, he said.
