Covid 19 has damaged business confidence, Venture Taranaki survey finds

The results of Venture Taranaki's latest business survey have been released.

Covid-19 has translated into a sharp deterioration in economic confidence for the next 12 months, according to Venture Taranaki's latest Business Survey.

More than half the survey participants thought the national economy would deteriorate, and 39.7 per cent thought Taranaki's economic outlook would deteriorate.

Notably, 79 per cent of respondents did not see an experienced skill shortage.

This is the highest confidence in the ease of hiring appropriately skilled staff since December 2016.

Almost half of enterprises surveyed did not think they need to change workforce numbers, and 13.8 per cent did not know. "Since our last survey, we are seeing an increase in the confidence of enterprises to be able to retain staff, although not increase staffing numbers. Labour availability was the third highest threat factor in November 2019, but now ranks 11th out of 15," says Venture Taranaki chief executive Justine Gilliland.

Results of the six-monthly survey indicate the current state of business confidence and key business issues in Taranaki during the Covid-19 pandemic.

Sent to more than 1700 enterprises over a cross-section of industries, the survey included the usual questions as well as a section on Covid-19 effects and lessons. Participants did the survey as New Zealand shifted to alert level one.

Responses for industry-specific outlook showed 32.2 per cent saw an improvement in the national economic condition of their industry for the next 12 months, 30.5 per cent saw it as staying the same, and 31 per cent thought it would deteriorate.

This level of outlook towards industry deterioration has not been since May 2009.

Sales forecasts are less confident for the next six months; 19 per cent of respondents thought sales would deteriorate, compared to only 8 per cent during the previous survey 6 months ago.

Key business concerns or factors identified as having the largest impact on Taranaki enterprises over the past six months were Covid-19 (23 per cent), declining markets (19 per cent), cost of business/materials (11 per cent), price of fuel (10 per cent), and price of electricity (10 per cent).

"Interestingly, but not unexpected, there has been a large shift in the identified threat factors since the last survey in November 2019. Previously fuel and energy prices were the most prominent threat, and these now rank as the fourth and fifth highest threats," she says.

Most respondents thought employment would hold firm. Compared to the November survey, confidence increased in enterprises being about to retain staff, although not increase staffing numbers.

In the Covid specific section of the survey, 45 per cent thought they were significantly affected by Covid-19, but were confident in their ability to recover. And 16 per cent said they had not been significantly affected by Covid-19.

The top three areas of business most affected during the pandemic were revenue slowing or ceasing (64.4 per cent), stress and anxiety (39.4 per cent), and cashflow difficulties (37.5 per cent).

Responding to the question "How concerned are enterprises on the ongoing impacts of Covid-19 over the next 3–6 months?", 43.4 per cent were not sure yet, 28.3 per cent were expecting a negative ongoing impact, and 10.7 per cent were expecting a positive effects.

Since mid-March, Venture Taranaki has conducted 3937 Covid-related interactions with enterprises, and has issued a total of $678,100 in funding across 710 approvals.

"We have also issued $117,033 worth of our regular growth and capability funding, bringing the total financial support for Taranaki enterprises to $796,133 since the lockdown and various Alert Levels," says Gilland.

"It's encouraging to see enterprises still pursuing growth and development at this time. And equally, I'm very proud of the team at Venture Taranaki with the work we have been doing to help enterprises during this time."

Venture Taranaki is also leading the economic recovery pillar for the region, as part of a wider regional recovery plan.

The plan has been created to guide and focus efforts from May 2020 to mid-2023 and integrates Tapuae Roa and Taranaki 2050 Actions, shaped by Covid-19 impacts.