UPFRONT Skills and confidence in short supply

Widespread difficulty finding skilled and unskilled labour remains major constraint on business growth and while business activity is still strong, more firms now anticipate deterioration in business conditions.
The NZIER quarterly survey of business opinion highlights decline in business confidence over the past three months with just over one third of firms expecting business conditions to deteriorate over the next six months. South Islanders, already more pessimistic than northern colleagues, didn’t register drop this quarter but the South Island is the only region where staff reductions have shown up (in net three percent of firms) for the second quarter in row.
Trading activity has shown sound growth but resource constraints remain problematic, as are cost and price pressures. The net number of firms reporting difficulty finding labour has eased but remains high in historical terms.
More than third of firms experienced increased average costs and 38 percent are anticipating increases over the next three months. However investment intentions remain high suggesting the current strong investment cycle still has legs which will help maintain economic activity, says NZIER.