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Headline small business confidence eased to a net 14% in September, down from 17% in August but remained respectable, ANZ managing director retail and business banking Antonia Watson said.
Releasing the ANZ quarterly Business Micro Scope survey yesterday, Ms Watson said confidence within micro firms (0 to five employees) slipped by four points and intermediate-sized businesses (six to 20 staff) dropped two points.
The ANZ composite measure — a key proxy for growth based on firms’ own activity outlook, hiring, investment and profit expectations — fell to 20% but remained elevated.
The composite measure for agriculture rose to historic highs, she said.
Otago Chamber of Commerce chief executive Dougal McGowan said the ANZ survey mirrored the results from the latest chamber survey but he was not concerned about the small fall in business confidence.
Most of Otago’s businesses were micro to intermediate-sized but they were adaptable to change — and could change quickly.
"Also, we have a growing number of franchises here. When business conditions are soft in some regions, staff can be moved to other areas where there is work. People are not being laid off. Instead, they are moved to meet the needs of their organisation."
Invercargill and Central Otago were prime examples of how workers were being brought in from other regions to meet skill shortages, he said.
The most important measure was jobs created and on that score, Otago had performed well. Small and intermediate-sized businesses were taking on two to four staff each year, Mr McGowan said.
At a recent lunch he hosted for 15 small business owners, 70 new jobs had been created by those owners in the last two years.
"If inflation and interest rates rise, that may be a problem but we can manage our way through this."
Ms Watson said agriculture-based businesses were upbeat, consistent with firm commodity prices. Business activity expectations for agriculture-focused small firms topped the other sectors for the first time in more than six years at 42%. Their profit expectations surged to a four-year high of 28%.
On the flip side, small firms in the construction sector were not so upbeat; their business composite growth measure fell from 27% to 16%. Activity, employment, investment and profit expectations all fell, although they remained positive, she said.
"The construction sector has been one of the main economic drivers in recent years but is now facing significant cost increases and credit constraints. There is an ongoing shortage of skilled workers, adding more tension to the situation."
Growth prospects remained steady across most regions. Cooling house prices probably accounted for Auckland’s falling growth expectations, Ms Watson said.