26 June 2018

Southland’s business confidence holding steady despite challenges

The Southland Times

Business confidence in Southland is looking strong in 2018, despite challenges with recruitment and rising fuel prices.

The results have come from Venture Southland’s 2018 Southland Business Survey, which got feedback from 350 businesses from April 10 to May 10.

Of the businesses surveyed, 74 per cent said they were confident in the Southland economy (down from 78 per cent in 2017).

Sales numbers were also positive, with 91 per cent of responders reporting steady or increasing levels of sales.

However, Venture Southland business services manager Alistair Adam said one of the key figures to come from this year’s survey were the increases in employment numbers.

For the first time since the survey began in 2014, Southland businesses were reporting employing more people than in the previous year, Adam said.

“This year, 32 per cent of businesses reported employing more people, which, when compared to 24 per cent in 2014, shows significant growth,” Adam said.

Adam said the establishment of Venture Southland’s labour market team, and the ongoing work of Southland Youth Futures has made significant contributions to this.

“For the third year in a row, more businesses are adapting their employment practices to recruit young people, women and working to retain older people in the workforce,” Adam said.

One of the key challenges presented in the findings related to rising fuel and energy prices in the region.

This year, 27 per cent of businesses reported these costs were becoming a source of pressure, compared to the next highest figure of 21 per cent in 2014.

Almost half (49 per cent) of all businesses saw this as a long-term challenge, compared to 39 per cent in 2017 and 29 per cent in 2016.

Woodlands transport firm A Phillips and Sons manager Murray Phillips said with rising costs there was a fine line between being profitable and keeping prices down.

Phillips said with a strong farming sector, business was going well, but high fuel prices could “take the gloss off” for contractors.

“It’s a never-ending sort of game – if you put prices up too much, then you end up with no business.

“It’s always going to be a challenge, so you’ve just got to get on with it and suck it up.”

Southland Chamber of Commerce chief executive Sheree Carey said the No 1 challenge for businesses was still the attraction and retention of staff, with the chamber advocating a New Zealand-wide regional immigration strategy to deal with the shortfall or workers.

The survey highlighted recruitment and retention of staff as an ongoing issue for businesses, with 50 per cent reporting challenges recruiting the right staff.

Carey said, overall, the results of the survey were refreshing, particularly given the dip in confidence being experienced in other regions.

“The fact the survey was taken before the announcement of Tiwai’s potline reopening and the CBD redevelopment plans were launched, we can only assume the trend will continue,” Carey said.

Other issues included quality of broadband and mobile services, with a third of survey participants expecting the quality of communications services to affect their business within the next three years.

Despite this concern, Adam said it was pleasing to see 63 per cent of businesses had implemented a new form of digital technology, up from 47 per cent in 2017.