Business confidence in the economy as a result of current lockdown has fallen sharply in the Waikato. with Net Confidence declining to -20%.
This is according to a survey conducted covering 504 businesses in the Waikato last week by Te Waka, a Waikato regional economic development agency and results of which were released today. The agency works in partnership with business, Iwi/Māori, local and central government with the intention of lifting employment and well-being across the Waikato region.
The survey indicates business confidence has fallen sharply in the latest lockdown, with Net Confidence in the economy declining to -20% today from +3% in March this year, but still better than the -31% during last year’s second lockdown in August 2020.
Te Waka Chair, Hamish Bell says “The latest lockdown is delivering a huge reality check for many. But while the trend is backwards, confidence is not as low as it was during last year’s lockdowns, suggesting the economy is in a better place to handle the challenges thrown by Delta.”
Net confidence in the Waikato economy is more positive, but has also declined to -2% – from +11% in March (-14% in August 2020). Businesses are also less confident about their sectors, with net confidence at -9.6% (+11% in March).
But businesses have some positive confidence(+4%) in managing their own situation, which is well off the +34% in March and better than the -17.5% in August 2020.
According to the survey, 86% indicate a negative impact of the lockdown on their businesses, with just under half saying the impact is major. Just over 11% are expecting a positive impact. Sixty per cent of respondents are making changes in response to the lockdown while 22% saying those changes are major.
When asked about the challenges facing business, companies are focussed on staffing, supply chain and ongoing uncertainty; with smaller businesses emphasising loss of customers and cash flow, Bell says:
“Concerns around staffing and supply chain are palpable,” noted Bell, adding “Despite significant growth, businesses are struggling to find staff; and supply chain constraints are causing major delays and massive cost increases, resulting in margin and cashflow pressures for business.”
He added, “Small businesses could be hit the hardest by this lockdown. Without the buffer that bigger businesses can maintain, the management cashflow is likely to become a growing issue.”
Seventy-eight per cent of those surveyed indicated that they have or expect to apply for wage subsidies. When asked about other support required, a third required support with business strategy, marketing and business continuity planning respectively.
The survey had responses from 504 businesses across a wide range of sectors. A third of those surveyed had revenues of less than $1m and 75% had under 10 employees, 12% had revenue of over $10m and 13% had more than 20 employees. Two thirds were located in the centre of the region (Hamilton, Waipā, Waikato District), a quarter were from the east (Thames Coromandel, Matamata-Piako, Hauraki); and the rest were from the Southern part of the region (Taupo, Ōtorohanga, South Waikato, Waitomo).