Business confidence in Rotorua is at its lowest level in more than a decade.
Only 6 per cent of respondents in the Rotorua Chamber of Commerce survey felt business conditions would improve in the next six months, compared to 15 per cent for centres from Taupo north, excluding Auckland, which recorded
18 per cent.
Chamber chief executive Roger Gordon said many businesses had expected to deal with a downturn for about a year, but this had stretched out into two years, with many firms "battening down the hatches and going into survival mode".
Some respondents warned to "expect more casualties in the new year" as a lot of small and medium-sized businesses reported a strong reluctance among consumers to spend or make decisions.
One point of optimism for 2011 was the economic benefit the Rugby World Cup would bring, with an estimated 80,000 people, and their credit cards, expected to come to New Zealand for the event.
But Rotorua business owners said much of the infrastructure spend for the World Cup had already been made and there was little on the horizon domestically after that event, leaving firms "at the mercy of a better performing world economy".
The survey also showed it was becoming increasingly difficult to find skilled staff. The number of Rotorua businesses reporting trouble attracting people with the right skills for their firm rose from 21 per cent in the March survey to 30 per cent in the latest figures.
December's data was higher than the Taupo north area's 23 per cent and nearly double Auckland's 18 per cent.
But the factor listed as the most limiting to expansion was demand, followed by finance.
"I am surprised at the continued level of pessimism in the business community, as we have had some positive local indicators recently, particularly regarding tourist inflows and airport loadings," said Gordon. But he said member retailers advised that activity in this sector was softer than normal and future order books were not as full as some manufacturing companies would like.
"Personally, I am still optimistic that Rotorua will have a better year in 2011 than it has experienced in 2010."
