Business confidence holding up despite Delta restrictions

Thursday, 30 September 2021

Businesses are expecting profits to fall and costs to rise, but hiring intentions are robust.

Business confidence has remained “remarkedly robust” in September in the face of ongoing Covid restrictions, ANZ has reported.

The bank’s latest monthly survey shows businesses’ confidence in the economy rising by 7 points, with only a net 7.2 per cent of respondents now forecasting tougher times ahead.

Firms’ assessment of their own activity slipped 1 point, with a net 18.2 feeling optimistic.

Respondents invariably assess the prospects for their own businesses as being brighter than for the economy overall.

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The survey was conducted throughout September as hopes oscillated over whether government measures will prove sufficient to get on top of a Delta community outbreak in Auckland.

ANZ chief economist Sharon Zollner said businesses’ expectations in Auckland remained remarkably upbeat.

Businesses there were slightly more upbeat about their own prospects and more markedly about the economy overall, when compared to the average elsewhere.

But Zollner said profit expectations and investment intentions slipped in the face of “relentless cost pressures”, highlighting that business conditions across the country were “anything but easy at present”.

Overall, expectations for costs and price rises remained “extreme”, she said.

“Employment intentions are robust so far, though the monthly fall in experienced employment across all sectors suggests some jobs have been lost during lockdown.”

Businesses reported their biggest challenges were finding skilled labour “followed by regulation and paperwork”.