Confidence survey surprise: Finding skilled staff still businesses' most common problem
Wednesday, 30 September 2020
ANZ says its latest survey of business confidence has found firms’ biggest problem remains finding skilled labour.
Despite the impact of Covid-19, recession-linked problems such as cashflow, debtors and access to finance were “well down the list” of most firms’ woes, it said.
The bank said the finding was “perhaps surprising”, given the higher level of unemployment caused by Covid.
But it said the closed border was making skilled labour harder to import.
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“There is undoubtedly a significant skills mismatch between those who have lost their jobs in retail and services and the parts of the economy with the strongest employment intentions; construction and agriculture,” it said.
A report from the Reserve Bank on Wednesday suggested the labour market had become “less efficient” since the Global Financial Crisis in 2008, meaning that higher levels of jobs vacancies could persist at a higher level of unemployment.
Possible explanations could include a decline in the transferability of skills, it suggested.
Business confidence appears still fragile, but slightly improving, less than three weeks out from the election, according to ANZ’s survey.
In its last full monthly survey before polling day, ANZ reported that businesses appeared confident that the “second outbreak” of Covid-19 in the community was well under control.
A net 29 per cent of firms surveyed believed “general business conditions” would deteriorate over the coming year, which was an improvement on ANZ’s August survey, but down slightly on responses it received earlier in September.
Businesses’ confidence in their own future was at its highest since February, at a net negative 5.4 per cent, “far removed” from its deep low of negative 55 points in April, ANZ said.
ANZ said most indicators ticked up as September progressed, including firms’ employment and investment intentions.
The bank’s interpretation of the survey was that businesses were “hanging in there”, it said.
“The levels of most activity indicators remain very subdued relative to pre-Covid days, and are still at levels regrettably reminiscent of 2009.”
There was also “real pain” in the services and retail sectors, it said.
But it “isn’t all doom and gloom out there, by any means”, it said.
“The worst case economic scenario we could have been facing – persistent tough restrictions – is now looking very unlikely, with the testing and contact tracing systems proving up to the task.”
Activity indicators were “miles off their lows, and not looking likely to return there, touch wood”, it said.
Many economies around the world would happily “swap problems”, it added.
ASB chief economist Jane Turner said the lifts in business confidence reported in ANZ’s survey were “further evidence that the post-lockdown economy is performing much better than ourselves and the Reserve Bank had expected”.