Business owners in Otago are starting to feel more confident about the future, both their own and that of the economy in general, the June Otago Chamber of Commerce business confidence survey shows.
"I do wonder if we have turned the corner," chamber chief executive John Christie said yesterday.
"A lot of businesses think this is the worst it can get and the winter quarter is always the worst in the year."
The survey was taken among chamber members in the first two weeks of June and collated last week.
Respondents were from Dunedin, North Otago, Central Otago and Balclutha.
Mr Christie was particularly heartened by the results, which showed that members' expectations for their own business situation had improved markedly since March.
There had been a fall in the number of members who believed their business situation would remain the same but the lines were starting to intersect, he said.
Among the key points of the survey results were:An expectation the New Zealand business situation would improve over the next six months, the first time the graph had been in positive territory for more than a year.
The retail sector showed the highest improvement, with more than 50% of respondents saying their own business would improve over the next six months.
The main business inhibitors continued to be "demand", followed by finance.
Mr Christie said the results for the New Zealand business situation was always a protest vote by members who sometimes used the category to express their displeasure at national events.
The improvement in that part of the survey boded well for the economic recovery.
"There has to be a caveat. There may be national or international events that occur that can affect the results one way or another."
Westpac last week released a survey showing consumer confidence had pushed back into optimistic territory in June, with the positive result being related to what had not happened rather than what had occurred.
The tone of global economic news had improved with the risk of a depression-like outcome diminishing.
Mr Christie said the chamber survey was current and, in the 15 years it had been operating, it generally got the results that reflected reality.
It was not analysed as much as bank surveys but it had proved to be accurate.
Members surveyed believed interest rates would continue to rise in the next 12 months, something that could affect business investment.
Access to finance could also affect business investment, with businesses carrying out maintenance but putting off major investment decisions, he said.
Both sales and profitability continued in negative territory, with the profitability result the lowest in 12 months.
"We have heard a lot about public companies struggling for sales but these results show private companies are also experiencing decreased sales."
One of the major costs for businesses was staff.
The survey showed that businesses expected to be taking on more full-time staff later in the year and that they were finding it easier to hire both skilled and unskilled staff.
Some businesses indicated they were still thinking of reducing staff numbers while rewarding productive staff with wage and salary rises above national expectations at 3% to 5%.
However, although respondents were prepared to pay good staff more, staff costs continued to be the biggest area of concern for businesses, followed by interest rates.
There were always businesses at the extreme of any survey, with some doing really well and others ready to close the doors. The survey results showed a "generally improving picture", Mr Christie said.
