Business Confidence Soars, Job Growth Expected in New Zealand

Business confidence in New Zealand has surged, with a significant number of firms anticipating an increase in hiring over the coming months. According to the latest Quarterly Survey of Business Opinion (QSBO) released by the New Zealand Institute of Economic Research (NZIER), a net 39% of businesses expect economic conditions to improve within the next six months. This marks a notable rise from just 17% in the September quarter, reflecting the most optimistic outlook since 2014.

The survey, which gauges business sentiment and economic expectations, indicates that 5% of firms reported an increase in staff numbers during the December quarter, while 22% plan to expand their workforce in the current quarter. This broad-based improvement in sentiment is particularly pronounced among manufacturers, with the building sector also expressing increased optimism about future conditions.

Despite this positive trend, caution remains. The QSBO has historically shown fluctuations in business sentiment that do not always align with actual economic performance. For reference, a year ago, 9% of businesses anticipated a strengthening economy for the first half of 2023, yet the gross domestic product (GDP) experienced a slight decline during that time.

The NZIER’s findings also reveal that a net 3% of firms experienced a drop in their own business activity in the December quarter. This coincides with data from Worldline, which reported a reduction in retail spending on discretionary items during the same period. Carolyn Young, Chief Executive of Retail NZ, noted that these spending figures underscore the ongoing challenges in the retail sector, highlighting that consumer confidence has not yet rebounded to necessary levels.

Analyzing the reasons behind this cautious optimism, Christina Leung, principal economist at NZIER, stated that businesses are increasingly positive about investment and hiring. Notably, firms are beginning to report difficulties in finding skilled labor, with a net 2% indicating challenges in recruiting qualified employees. Leung commented, “We are starting to see pockets of labour shortages.”

As New Zealand navigates its economic landscape, the latest QSBO findings offer a glimpse of hope for job seekers, with businesses gearing up for a potential hiring wave in the near future.