Otago businesses appear less confident about the immediate future than they did in the previous quarter.
The Otago Chamber of Commerce quarterly business confidence survey found those expecting their own business situation to improve soon fell from 53.39% in the December 2009 quarter to 47.28% in the March quarter.
The percentage expecting conditions to stay the same was steady at 37.71% compared with the previous survey's 36.96%, but those expecting a deterioration rose from 6.36% to 14.13%.
This was the second consecutive survey to show a decline in the number of optimists.
In the September 2009 survey, 64.46% of respondents expected their situation to improve.
The Otago chamber's chief executive, John Christie, said while the survey still showed optimists outnumbered pessimists, concerns over lack of demand (57.07%), finance (19.02%) and capacity (9.78%) had altered the balance.
These three issues were identified as the leading obstacles in the December survey.
There was also a clear differentiation between sectors.
Over 54% of those involved in manufacturing expected conditions to improve, while 12% expected them to deteriorate.
Among retailers, 27% expected an improvement and 18% a deterioration.
Mr Christie said while his survey appeared more pessimistic than the NZIER survey also released yesterday, the disparity could be because of differing sentiments.
Both surveys highlighted a lack of profitability and hiring intentions.
Otago businesses expected profitability to decline after an improvement in the past two surveys, Mr Christie said.
Staff costs (37.7%) were expected to have the biggest impact on the profitability of Otago businesses in the next six months, but its significance fell from 43.64% in December.
When asked what areas businesses viewed as of highest concern in the next six months, staff costs again topped the survey at 38.04% followed by interest rates at 22.28%, the exchange rate at 16.85%, fuel costs at 13.59% and inflation 10.87%.
Mr Christie said 24% of respondents had seen an increase in sales since the last survey and 27% expected that trend to continue in the next three months, while 39.67% expected sales to stay the same.
A further 15% tipped sales to fall.
More than two-thirds of respondents expected to retain current staff numbers for the next three months, 17% expected an increase and 6% thought employee numbers would drop.
Close to 60% expect wage rises in the coming year of up to 2% and 27% tip an increase of between 3% and 5%.
