Westpac’s regional roundup report has found businesses are continuing to experience “soft” trading conditions, especially in retail and construction, but there has been a modest lift in demand. Photo / Emma Houpt
Westpac’s regional roundup report has found businesses are continuing to experience “soft” trading conditions, especially in retail and construction, but there has been a modest lift in demand. Photo / Emma Houpt
There are early signs the economy is picking up, a new survey has found, with households and businesses reporting still challenging but improving conditions.
Westpac’s regional roundup report has found businesses are continuing to experience “soft” trading conditions, especially in retail and construction, but there has been a modestlift in demand.
“While conditions remain challenging, businesses have told us that they aren’t going backwards like they did over the past year,” the bank said.
“And in some parts of the country, we’re seeing early signs that those wintery conditions are starting to thaw, with several businesses reporting signs of a modest lift in demand, albeit from a low base.”
“Conditions in the region have been buoyed by both the firmness in the agricultural sector, as well as increases in international tourist spending,” the bank said.
“In contrast, the economic climate remains cooler in urban regions like Wellington.
Westpac described Otago, including the Queenstown-Lakes District, as the “star performer” based on results in the report. Photo / Westpac
“Ongoing pressure on household finances and related low levels of confidence are continuing to weigh on spending.”
Fewer businesses have reported having to reduce their workforces than earlier this year, the report showed.
But while they are not getting rid of their existing staff, businesses are still reluctant to take on new staff, the report said. Several businesses said they were waiting and watching the economy.
“Among the relatively low number of businesses that have been looking for staff, many told us that it’s been much easier to find better-qualified candidates,” the bank said.
“Notably, we’re not hearing any comments about pressure on wages (other than what we normally see for highly specialised roles).”
And while some businesses continue to report inflationary pressure on operating costs and margins, those comments have become “less prevalent” than in previous years.
“Several [businesses] highlighted large increases in fixed costs, like rates and insurance. However, in contrast to the past few years, those comments about upward pressure on operating costs have become much less prevalent, as have comments about margin squeeze.”
Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.
