17 Dec 2021

Business confidence on slight decline heading into 2022 - report

4:52 pm on 17 December 2021

Businesses are going into the holiday season with a slightly more downbeat view in the face or rising costs and trouble getting skilled staff, according to the last survey of the year.

Generic business invoice shot

Photo: 123RF

The ANZ Bank's monthly survey showed companies slightly less confident about their own outlook, a net 12 percent from 15 percent in November, while headline sentiment grew more downbeat falling to its lowest level since September last year with 23.2 percent expecting the broader economy to get worse from 16.4 percent pessimism last month.

ANZ chief economist Sharon Zollner said all in all the survey's indicators were at "respectable levels".

"We've come through the pandemic thus far in much better shape than many, with a record-high employment rate and businesses in remarkably good heart, given how difficult it is to plan in this kind of environment."

Firms expect lower exports, profits, investment, and to hire fewer staff, while they were facing higher costs and finding it harder to get credit.

Zollner said businesses were finding a lack of skilled staff, and rising costs remained their most pressing problems, but freight disruptions were getting no better, with outward freight worsening over time, while inward freight is a bigger problem overall.

"Clearly, supply-side problems are not going away any time soon. And they're inflationary."

A net 88 percent of firms reported higher costs, nearly two-thirds of respondents were planning to raise prices, and the number finding it hard to get credit edged to a record 70.6 percent.

Zollner said firms had come through the year in much better shape than many countries and in "remarkably good heart" even though next year offered much uncertainty.

"It's not an easy situation at all, but New Zealand firms are getting on with it as best they can. "

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