Taranaki business confidence up but concerns grow over international supply chains

Venture Taranaki release November 2020 Business Survey results.

The results of Venture Taranaki’s latest six-monthly Business Survey indicate that Taranaki enterprises have a much more positive outlook on the national, regional and industry economic outlook than the previous survey in June 2020, which was conducted shortly after the country’s reprieve from Alert Level 1 lockdown.

The results can be viewed here.
Of the participants that filled in the recent November survey, 28% have changed from a ‘deteriorate’ view to ‘remain the same’ or ‘improve’, when talking about the national outlook.
“There has been a significant shift in those with a more positive outlook over the next 12 months – with only 22.6% of respondents believing the national economic outlook will deteriorate, from 51.2% previously,” explains Venture Taranaki Chief Executive Justine Gilliland.
Taranaki enterprises also have a slightly more positive view regarding their own industry outlook compared to the national and regional outlook.
“In our May 2020 survey, responding to industry economic outlook, 31% indicated they thought there would be a deterioration, whereas in the results from the recent survey, only 12.6% thought their industry would see deterioration. This is a huge difference, and indicates that enterprises are feeling a little more certain about the future,” says Justine.
Similarly, Taranaki enterprises are feeling more positive about the economic outlook for Taranaki, with 40% of respondents indicating they see an improvement in Taranaki’s economic outlook. This is compared to the 28.7% of respondents from the June 2020 survey that saw improvement for Taranaki’s economic outlook.
“It could be that our enterprises are feeling more positive about our regional economy due to a sense of increased certainty about the future, the return of customers, the prospect of new opportunities, the boost of support from locals and the success of campaigns such as Go Local,” suggests Justine.
“It could also be the surge of recent regional events, the strength of our primary industries, our strategic regional forward planning in the form of Taranaki T2050 and Tapuae Roa, or the lack of reliance on international tourism here in Taranaki,” she continues.
Most enterprises anticipate no changes to staffing levels, although 31% of enterprises are still experiencing skills shortages, with many enterprises sighting they have good staff already employed and the lack of desire by younger people to want to work as barriers to overcoming this, as well as indefinite boarder restrictions.
“This is an increase of more than 11% for skills shortage since the June 2020 survey, which is of concern,” says Anne Probert General Manager Regional Strategy and Sectors.
This survey's special topic included questions about 2020 and the impact on enterprises of considered legislative changes by the incoming Government. The results provide experiences, learnings, and challenges that Taranaki enterprises are facing as well as an insight into the potential impacts of considered legislative changes by the newly formed Government.
“COVID-19 remains the biggest concern for Taranaki enterprises, followed by wage rates and/or the cost of staff. Many enterprises also sighted the potential changes of increased sick leave entitlements and increasing minimum wage rates by the incoming Government as areas for concern,” notes Anne.
While enterprises stated the importance of keeping COVID-19 at the border, the effect of allowing skilled people and materials to enter the country (and region), was highlighted as an important action for the newly formed Government to consider.
There were mixed feelings around the proposed changes by the incoming Government for enterprises, although responses indicate that free access to apprentices and training, the requirement for government agencies to bring forward invoice payment deadlines, as well as a redevelopment of skills match with the immigration system, are seen as positives for enterprises,” adds Anne.
International supply chain constraints is the largest global issue believed to impact Taranaki enterprises over the next 12 months, followed by ongoing border restrictions.
“Access to products and services we have always taken for granted, such as project parts, construction materials or consumer retail goods that are dependent on international suppliers, are really starting to create challenges, and bottle-neck impacts for Taranaki businesses, but it could also create new opportunities,” explains Anne.
“Venture Taranaki undertakes the Business Survey every six months, and we have done since 1999, so the data set is vast. It is sent out to more than 1700 enterprises over a cross-section of industries, so we cover a lot of areas and get a really good insight across Taranaki. The results of this recent survey will act as an indicator of business confidence as we wrap up 2020, and provides valuable business and regional insights as we look to 2021,” concludes Justine.