In what can only be a good indicator for New Zealand's economic outlook, the Mood of the Boardroom survey shows a clear majority of business leaders plan to either maintain or increase capital expenditure and investment in staff and IT in the next year.
However the level of positivity has fallen since last year's survey.
For example just 48 per cent said they expected to increase capital expenditure compared with 56 per cent in 2017.
In terms of earnings expectation 58 per cent expect their business to grow profitability in the next year and 68 per cent expected revenue to grow.
That compares with 75 per cent and 82 per cent respectively in last year's survey.
Though the CEOs responding to the 2018 survey appear broadly optimistic about their own outlook they do highlight several issues of concern.
Optimism about the domestic economy has dipped.
More than 55 per cent of business leaders were slightly less optimistic about the domestic economy than they were a year ago, 16 per cent were much less optimistic.
On the domestic front some perennial concerns such as transport, traffic congestion and skill shortages remain top of mind — as they have for the past few years.
But some other issues specific to the new Government are starting to show through — proposed employment law changes are seen as concerning by a large majority of respondents and as extremely concerning by 15 per cent.
The Coalition's proposed employment law reforms are currently going through the parliamentary process — and have just completed select committee.
The issues that business groups highlight as cause for concern include the repeal of the 90-day trial periods for firms with more than 20 staff, the rise in the minimum wage and a strengthening of the collective bargaining framework which will give unions easy access to the workplace. The centre-left Coalition and business are never likely to see eye to eye on employment law but one broader issue raises even more cause for concern.
"General uncertainty around the impact and direction of current policies" is seen as extremely concerning by 16 per cent.
This is where the ball is more squarely in the Government's court.
Efforts thus far to reassure business have been undermined by execution in relevant areas — such as the debacle around the appointment of the chief technical officer.
Grant Robertson will be quick to remind business leaders that there has been no wavering on the core policy of fiscal responsibility — which should underpin a base level of confidence in the Coalition even if there is concern about specific policies. But the announcement and subsequent selling of the ban on offshore oil and gas exploration provides another example of a move which has sowed uncertainty in the minds of business.
Business also has concerns about the lack of a policy framework on immigration.
Pre-election there were promises to make substantive cuts. The fact that net migration gains remain strong has been a plus for business.
But a lack of clarity about longer term immigration policy will be adding to uncertainty for businesses facing skills shortages which require offshore labour.
On the global front, the numbers also reflect growing concern about economic risks — with 55 per cent slightly less optimistic and 18 per cent much less optimistic.
The ever present — and often very acute — risk of cyber security breach remains the single largest cause of concern for business leaders in the survey. However, in aggregate, a host of issues relating to international trade appears to be looming as one of the biggest concerns right now.
These include: the trade war between the US and China, protectionism, the Trump factor in US politics, the uncertain Chinese economy and US tariff hikes.
Those issues rank consecutively as the next five biggest risks, after cyber security.
The threat that fallout from a trade war could slow or even crash the global economy is very real and especially acute for a small trading nation like New Zealand.
Commodity prices have already taken a hit this year.
On top of trade tensions is the underlying nervousness about the sustainability of global growth as we head into our 10th year of recovery from the global financial crisis.
Stock markets are riding precariously high and expectations are that interest rates will start to rise putting pressure on global debt levels.
In tandem, the lack of confidence in the Government and increasing global risk are combining to take the shine off what is otherwise becoming one of the longest sustained periods of growth in New Zealand economic history.
That's a shame, because as we roll past the traditional timeframe in which the local economy has tended to come unstuck, the bonus years should be providing business with confidence and an opportunity to invest in ways that will provide a buffer against the next external shock when it inevitably arrives.
