Businesses urged to invest as confidence plummets

by Ksenia Stepanova23 Jul 2018

New Zealand’s business leaders are getting less confident in the country’s economic outlook, according to a new report released by Grant Thornton.

Optimism fell from 76% in the first quarter to 60% last quarter; the figure which is consistent with the global average, which saw optimism fall from its all-time high of 61% in Q1 to 54% in Q2.

Nonetheless, New Zealand has bucked the global trend of stepping back from investment opportunities. Investment in research and development has doubled between the first and second quarter with $1 billion earmarked for this year’s budget, investment in technology is also slowly rising, and expectations for employment went up from 46% to 60%.

“These figures tell us that although there’s some anxiety about the economy, a lot of business leaders are still doing well and making all the right moves to future-proof their operations,” said Paul Kane, partner, business advisory services at Grant Thornton New Zealand.

“The R&D investment figures are particularly promising, because although there’s a tax credit regime in the pipeline, business owners know they will still have to invest in further resources and technical abilities. Businesses don’t make this sort of commitment if they’re not confident they can pay the bills.”

“New Zealand businesses look to be taking the opportunity to invest, but they will need to make sure they are investing to a level which will help them ride out the economic shift predicted in the future,” Kane continues.

“There is a sense that 2018 may be as good as it gets for the global economy. The bottom line for businesses is to ensure they can still make hay as the sun sets over what has been a boom during the last few years; history tells us it’s just around the corner.”

 

Related stories:
Survey reveals decline in knowledge of KiwiSaver
Housing confidence: a positive picture across NZ

 

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