Waikato Business News April/May 2021

WAIKATO BUSINESS NEWS April/May 2021
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Te Waka chair Hamish Bell says border
restrictions appear to have highlighted
under-investment in people and skills
Waikato businesses
more optimistic
Regional economic development agency
Te Waka’s second Waikato Business
Sentiment Survey shows business
owners and managers are significantly
more optimistic about their sector and
the region’s economic performance than
they were six months ago, but remain
less confident in the country’s economic
performance as a whole.
Conducted in partnership
with local authorities,
chambers of commerce,
regional tourism operators,
business associations and other
economic development organisations,
the survey provides
insights to the performance of
business in the prior six-month
period and is an indicator of
confidence looking ahead.
Between February 15 and
March 12, 565 responses were
collected online. This was consistent
with the August 2020
survey (589) and had a greater
response rate than the ANZ
National Business Confidence
Survey. Both surveys calculate
net confidence by subtracting
the percentage of those
who believe the economy will
improve from those who feel
the economy will deteriorate.
Te Waka chair Hamish Bell
said feedback from respondents
across Waikato shows a
marked increase in net confidence
in the economy for the
six months ahead for their own
business (34 per cent), their
sector (from -10 per cent to 11
per cent) and the region (from
-14 per cent to 11 per cent).
Confidence in New Zealand’s
economy increased from -31
per cent to -3 per cent.
Thirty-three per cent of
respondents reported increased
sales for the full 2020 calendar
year compared to 2019,
and 45 per cent are forecasting
increased sales compared
to the same period last year,
particularly in health services,
manufacturing and
construction.
Bell said stronger sales have
contributed to a more robust
outlook for manufacturing,
construction and retail trade;
however, supply chain issues,
increasing price of goods, and
skills shortages - notably in
management and specialised
technical skills - are affecting
productivity in construction,
manufacturing, primary industries
and transport.
“The Covid-19 border
restrictions appear to have
highlighted under-investment
in people and skills. Not only
demand for skills but inability
to meet that demand is a disturbing
trend.”
Waikato Regional Council
principal economist Blair
Keenan said that for all the
concerns about the effect of the
border closures on the ability
to access suitable labour, 48
per cent of respondents identified
the shortage of skilled
New Zealand residents as a
problem, compared to just four
per cent who thought it was a
problem of a lack of skilled
immigrants.
“A better understanding of
precisely what kind of skills
we’re lacking is an important
piece of information that needs
to be explored,” said Keenan.
Bell said while it’s encouraging
to see businesses investing
in business, financial,
personnel and continuity planning,
there are still about 25 to
50 per cent of businesses with
11 or more employees who
do not have planning tools in
place, and 45 to 72 percent of
small businesses of up to 10
employees without planning
tools.
He said the region was
also seeing the impact of supply-side
issues on both import
and export industries, with
58 per cent of respondents
in those sectors considering
raising prices.
Overall, the Waikato
economy has
weathered the
Covid-19 recession
better than we
might have feared a
year ago when the
prospect of mass
unemployment and
deflation seemed a
real threat.
Keenan said the emergence
of supply-side issues “have the
potential to derail the recovery,
for example through higher
inflation and a subsequent policy
response from the Reserve
Bank of New Zealand”.
Hospitality and tourism are
still bearing the brunt of Covid-
19, having recorded 74 per
cent reduced sales, and 17
per cent of these recorded
50 per cent or more reduction
in sales. “The hospitality
and tourism sector sees
its prospects remaining relatively
bleak, with two-thirds
of respondents expecting
business to worsen in the
coming months.”
The survey pre-dates
the announcement of a
trans-Tasman bubble, and
Keenan said the benefits of
the bubble for the Waikato
region may not be all positive.
“Setting aside public
health issues, domestic
tourism is important to the
sector in Waikato, and the
re-introduction of international
options may effectively
increase competition
for the domestic market.
“Overall, the Waikato
economy has weathered the
Covid-19 recession better
than we might have feared
a year ago when the prospect
of mass unemployment
and deflation seemed a real
threat.”
However, he cautions
that while it is encouraging
that Waikato businesses
are optimistic about the
region’s economic outlook,
the recovery remains both
patchy and fragile.
Bell agrees. “It’s encouraging
that the survey and
personal engagement with
industry indicate broad
optimism, noting the natural
strengths of Waikato
as a region, but we need to
remain cautious about the
concept of ‘the calm before
a storm’.
“We can’t afford to
become complacent. I’ve
seen several economic
downturns from the inside
and hearing first-hand from
businesses across the region
of the challenges they are
facing as the months have
progressed.
“Having said that, the
data expertly informs the
big picture for our region
but with clear, tactical
detail, which helps Waikato
have a stronger voice in
advocating to government
for support, with a clear
message and one voice for
Waikato business.”
The Waikato Business
Sentiment Survey will continue
to be conducted sixmonthly,
online. Te Waka
uses the survey insights to
guide its economic development
work and delivery
of business support services
across Waikato, alongside
regional partners.
Briggs to step
down
Hamilton City Council Chief
Executive Richard Briggs will
leave the organisation when
his contract expires in mid-
October. Briggs joined the
organisation from Fonterra in
2012 as chief financial officer,
and was appointed chief
executive in 2014 during
Julie Hardaker’s mayoralty.
Briggs said he intends
staying in Hamilton close to
family and friends but has no
plans to remain in the local
government sector.
Meanwhile, the council has
a new general manager
growth. Blair Bowcott, who
has been on the council
senior leadership team
since 2007, will take up the
position at the end of May,
replacing Jen Baird who has
a new role as chief executive
of the Real Estate Institute of
New Zealand (REINZ).
8.9 percent rates
rise for city
Hamilton City Council has
agreed to prepare a 10-
year budget based on a
compliance targeted rate of
4.5 percent and a general
rate increase of 4.4 percent.
The decision will mean an
average annual rate rise of
8.9 percent across the city.
New chair for TGH
Waikato-Tainui has
appointed Hinerangi
Raumati-Tu’ua as chair
of Tainui Group Holdings
(TGH), the commercial
investment arm of the iwi.
Raumati-Tu’ua (Waikato,
Ngaati Mutunga) took
up the role at the start of
May, with outgoing chair
Sir Henry van der Heyden
retiring by rotation. Raumati-
Tu’ua was appointed to
the board in November
2017. She is a fellow of
the Institute of Chartered
Accountants, a member
of the New Zealand Order
of Merit, the current chair
of Paraninihi Ki Waitotara
Incorporation and Moana
NZ, and a director of
Sealord, Watercare and
several iwi commercial
entities. In 2017 she was
named the Maori Woman
Business Leader of the Year.
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