Business optimism high, but issues highlighted in report

Business optimism at 68% for New Zealand, Grant Thornton’s Business Report shows

Business optimism high, but issues highlighted in report
Global survey findings reveal that global business optimism is continuing on a positive trajectory, according to Grant Thornton’s latest International Business Report (IBR).

In the Asia Pacific region, optimism has increased significantly, leaping to an historic high of 58% over the last year and APAC GDP growth is forecast to reach 5.5% this year, ahead of global projections.

New Zealand business optimism remains at 68% compared to last quarter after a slight, but expected slump around election time, dropping from 80%. The New Zealand Institute of Economic Research has noted the decline in confidence was less severe than in previous election years.

New Zealand continues to pull ahead of Australia, who sits at 60%.

“Revenue and profitability forecasts are also starting to soar globally since last quarter, and are at their highest since before the global financial crisis; businesses are expecting to see both continue to rise,” Grant Thornton New Zealand privately held business Paul Kane said.

“However, firms must avoid short-termism and increase their investment in long-term growth.

“Unfortunately, the IBR has revealed that investment in employment and technology is starting to slip among Kiwi businesses surveyed, and investment in plant and machinery has declined to an historical low of 6%. Meanwhile, a lot of our global counter parts are boosting investment in these areas.

“New Zealand businesses will need to meet growing demand through hiring more staff and the move towards automation presents opportunities for businesses to invest in technologies to increase productivity”.

“We are fast approaching the peak of the current economic cycle. Businesses need to start thinking about what they can do to leverage opportunities in the current environment to ensure the party doesn’t stop when the global economy comes off its current high,” Kane added.


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