27 Apr 2023

Strong link between business financial performance and wellbeing, study shows

5:51 am on 27 April 2023
Christchurch construction.

Wellbeing was declining in the construction sector, the report found. Photo: RNZ / Alexander Robertson

Financial pressures are the leading cause of negative wellbeing among business leaders, a new report shows.

The Wellbeing and Business Performance Index from accounting firm BDO, shows half of New Zealand business leaders have been feeling worse off when it came to mental health.

The report was based on feedback from 504 business owners and leaders across the country.

Forty-four percent cited business financial pressures as the top reason for the mental wellbeing pressures, up 10 percent from October.

It was followed by external economic factors such as interest rates, inflation and the rising cost of living.

BDO business advisory partner Kimberley Symon said those factors came at a difficult period for businesses.

"That is all at the same time, across a number of sectors, being coupled with a drop in sales, because of course, consumers out there, some of them don't have the spending power that they did previously," she said.

BDO said there was a strong link between business financial performance and wellbeing.

As this was the third survey, the firm was better placed to see the link between wellbeing and financial performance, Symon said.

"We're quite clearly seeing as business financial pressures increase or as life gets harder, the wellbeing of our business leaders is also suffering."

For the first time since the survey's inception last year, Covid impacts did not make the top five list of mental wellbeing pressures, BDO said.

The future outlook among New Zealand business leaders was positive despite a drop, with 65 percent saying they expected to feel generally satisfied with life all or most of the time in six months.

This was a 7 percent drop from October.

"Kiwis tend to be quite positive people, we like to get on and just get the job done. So looking forward, future sentiment is slightly more positive than current sentiment, in terms of business performance and wellbeing," Symon said.

The BDO report also found that wellbeing was declining in the construction and retail sector, while wellbeing improved in the tourism sector.

This was a reflection of the weaker housing market, weak consumer appetite and rebounding tourism, Symon said.

The survey found concerns around sustainability entered the top five causes of negative wellbeing for the first time.

The survey was carried out in the first two weeks of March, shortly after severe weather events such as Cyclone Gabrielle, when environmental concerns were top of mind.

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