The Otago economic year ahead is likely to have some mixed results as sectors are affected in various ways. Challenge remain for the agricultural sector while tourism is likely to continue booming. Business editor Dene Mackenzie looks at what are likely to be the key issues this year.
One thing is certain this early in the year: A sense of resolve to make the Otago economy successful and Dunedin, in particular, wants to lead the way.
Otago Chamber of Commerce chief executive Dougal McGowan says the key to business this year, and the economic development of the city, will be the local body elections.
Businesses would be watching and wanting to ensure a positive, pro-business council was elected.
When reminded that previous chamber of commerce boards and chief executives had been calling for the same thing for many years, Mr McGowan said more use needed to be made of the capable and passionate people available to take leadership roles.
"We need people to own parts of the economic development plan. Even with uncertainty in international markets and commodities, Otago businesses are well placed to grow and make the most of the the changing fiscal and economic environment.''
One of the great opportunities was for the city to continue on the path of "true collaboration and consultation'', where partnerships were fostered and shared ownership of development for the city was embraced, he said.
"For this to happen and for people to want to contribute, true dispersed leadership is required in economic development and the implementation of the economic strategy.''
In 2010, a group met in Dunedin to chart the city's economic development from 2012 to 2020.
The group included representatives from the Dunedin City Council, the chamber, the Otago-Southland Employers Association, Otago Polytechnic, the University of Otago, Ngai Tahu and central government.
After a flurry of meetings and publicity, the strategy appears to have disappeared from the forefront of activity.
Mr McGowan said it was time to get back to the plan, investigate what had happened, what was working, what had failed and how it could be adapted to meet changing circumstances.
It was vital to continue rolling out Dunedin's Economic Development Strategy.
One of the key aspects was making Dunedin a place where it was easy to do business through relevant and responsive bylaws, efficient planning and resource-management processes and building regulations.
Adding to the image and identity that would help retain and attract tourists was the city's greatest asset - its people.
"It would be great to see new businesses being attracted to Dunedin, but more importantly, that Dunedin becomes the city of first choice when looking to establish or relocate a business.''
Crowe Horwath tax advisory managing principal Scott Mason, of Dunedin, said based on what information was already to hand, and what his firm was seeing from its client base, 2016 was going to be a mixed year across the Dunedin and Otago.
Weak commodity prices across the globe were predicted to continue, which had a negative impact particularly on dairying and farming.
However, there were ancillary positive spots.
Never had so much honey been exported at such good prices, for example, he said.
Overall, the primary sector was heavily leveraged, looking at lower income due to both soft prices and less production - planned and unplanned - and would continue to have spending constraints.
"This naturally filters into the towns and cities, as there is less money in circulation. This could be partially offset by cheaper borrowing for homeowners and consumers, creating more disposable cash.''
At the same time, the dollar was predicted to soften and remain soft, which was good for exporters but bad for consumers, as imported goods got more expensive.
If that countered lower interest rates it would make for another challenging year for retailers, Mr Mason said.
Mr McGowan said retailers would need to continue to focus on online versus shop-front selling of goods.
There were increasing challenges for those with only a shop-front aspect to their business but law changes were making it easier for shop-owners.
Mr Mason said some "very industrious companies'' in Dunedin and Otago were doing well, many of them using technology to take on the world.
The lower dollar could only help them on their way.
"The start-up scene has not been this vibrant for probably 10 years and while only some will ultimately be successful, those few have the potential to make a big impact.''
Infrastructure was important for many businesses and Mr McGowan said moving to broadband platforms and making websites mobile-compatible presented huge challenges for businesses.
Expectations were high for businesses to maintain a presence in an increasingly mobile age.
Both men agreed tourism was riding high in activity and confidence.
Growth could be fuelled further by the softer dollar.
Dunedin continued to benefit from both cruise and self-guided tourism and better use of the Forsyth Barr Stadium.
However, the real action was in central Otago where there was a mini-boom, Mr Mason said.
"This will drive demand for property, services and accommodation.
"Other than creating both infrastructural issues and challenges around affordability of living for both Kiwis and migrant workers, this can only be good for the province as a whole.''
Mr McGowan said Dunedin was known for its "softer'' eco-tourism while Central Otago and the Queenstown-Lakes districts were known more for their adventure tourism.
"We have to make sure we don't just keep an eye on the here-and-now but on the future and look at what the next step might be.
"Perhaps it is the night sky. We need to look ahead.''
Asked what his plans were for the year, Mr McGowan said he would maintain regular meetings with chief executives in the region, look for development opportunities and hope for the election of a business-friendly council.
"The business people I meet want to employ more people, they want to grow. It is enlightening to speak to the chief executives. They choose to be here and want to see the city grow. That's why they are still here.''
Mr Mason said attracting skilled workers was difficult for companies that were growing rapidly.
"It is my perception this is getting a little easier as our northern counterpart cities continue to price themselves out of the ‘living cost' market.
"We can only continue to sell the message around the combo of lifestyle and opportunities in our city. I have seen several of my clients have their best-ever external non-Dunedin recruitment year in 2015.''
What's hot
• Tourism is riding high and should be helped by a lower New Zealand dollar.
• Business confidence is high in the south with expectations of growth.
• Construction is providing small contractors with a diverse work stream.
• Exporters, including farmers, will benefit from a lower dollar.
What's not
• Rural sector will be affected by lower dairy prices and possibly by the El Nino weather pattern.
• Retailers will face challenges from online retailers, higher prices because of a low dollar, and high consumer debt.
• Weaker commodity prices may result in rural spending constraints affecting Dunedin.
