Business confidence among small firms has fallen to a nine-year low, with construction reaching negative territory, according to an ANZ small business survey. Photo / Bay of Plenty Times.
Business confidence among small firms has fallen to a nine-year low, with construction reaching negative territory, according to an ANZ small business survey. Photo / Bay of Plenty Times.
Business confidence among New Zealand's small firms fell to a nine-year low in the June quarter, according to ANZ's quarterly Business Micro Scope survey.
A net 30 per cent of small businesses were pessimistic about general business conditions, the most since March 2009, ANZ said.
Confidence slipped in both microfirms - companies employing up to five people - and intermediate-sized businesses (six to 20 employees), unwinding gains in confidence reported in March, the banks said.
"Regulation remains the biggest concern facing small firms, particularly those in agriculture," said Antonia Watson, ANZ's managing director retail and business banking.
"Difficulty finding skilled employees is an ongoing challenge for many small businesses, particularly in construction, manufacturing, services and retail, and it continues to weigh on their confidence," she said.
External factors were also impacting confidence levels, including a cooling housing market and intense online and offshore competition for retailers.
The ANZ composite growth measure for small firms – a key proxy for GDP growth – fell across all sectors, with agriculture and construction reaching negative territory.
"While sentiment remains pessimistic, the results suggest small firms are still experiencing sustained demand for their goods and services, however, potentially at a decelerated pace," ANZ said.
Profit expectations fell deeper, affected by the construction sector dropping 54 percentage points to -14 per cent, which Watson said most likely reflected rising construction costs and labour shortages.
The ANZ Business Micro Scope is a quarterly indicator which focuses on the prospects of small businesses across New Zealand.
The survey was launched in March 2012 to address a lack of ongoing research specific to the small business sector.
