Business bounce expected
Confidence appears to be returning to the Queenstown Lakes business community following the General Election.
Queenstown Business Chamber of Commerce surveyed 135 of its members for its latest Q3 quarterly pulse-check, and there was a stark difference to Q2 2023.
Some 22% (all percentages are net*) expected the economic outlook to be positive for their business over the coming months, up from just 1% in Q2.
And 19% believed the regional economic outlook, for Queenstown Lakes, would improve, up from -18%. There was also a seismic shift in the positivity for New Zealand's economy as a whole, with 8% net positive, compared to -46% last quarter.
"Businesses have a renewed sense of optimism," Chamber CEO Sharon Fifeld told members. "While the election may play a role in that, coming out of our quieter months and towards summer peak will be improving confidence.
"Economic outlook results have shifted from net negative to positive for both the Queenstown Lakes economy and NZ economy as a whole."
Demand is also expected to pick up with input costs starting to track downwards.
"This means that businesses are expecting some improving margins, finally.
"However, demand is cited as the single factor most limiting businesses ability to grow with 30% of respondents, similar to the previous quarter."
It is clear that businesses have seen a decrease in activity and profits over the past three months compared to the same period the previous year.
In Q3 last year, labour / finding staff was the major concern, with 40% of businesses reporting it was the greatest limiting factor. That has now abated, with less than 20% reporting it as the major factor, compared to the 30% now citing demand.
Some 54% expect wages to increase over the next three months, with 52% reporting increases over the past three months, although projected increases are moderate.
In terms of operating demand vs capacity, businesses operating at over 75% capacity made up 82% of respondents in the latest quarter, compared to 80% last quarter. Businesses operating at less than 25% capacity made up 2% of responses in the latest quarter.
"Thanks to all those that completed, it is such a useful read on the mood of our local economy to assist in advocacy and to understand what is holding business back."
* Where applicable, results are summarised in net terms by taking the percentage of businesses reporting an increase in the indicator in question, minus the percentage reporting a decrease. This approach gives a reliable indicator that can be tracked over time.