Auckland bubbling with optimism

Auckland business is "fizzing with confidence" thanks to the America's Cup and an influx of migrants and language students, reports an Auckland Chamber of Commerce survey of members.

Done last week, it found that 82 per cent of businesses expect the economy to stay the same or improve in the next six months.

Even more significantly, 58 per cent of respondents think their own businesses will do better in the next six months, while 33 per cent expect things to stay the same. Only 17 per cent now think the economy will deteriorate, and just 8 per cent expect their own businesses to go backwards.

As a result, the survey found a solid increase in the number of firms planning to increase spending on buildings, boost investment in machinery and take on more staff.

Chamber chief executive Michael Barnett said the survey showed that whatever might be happening in the rest of the country - with recent national surveys showing a decline in business confidence - the Auckland economy was "fizzing".

The weather might be mixed, but the region was enjoying an economic Indian summer.

"Among the drivers are clearly the America's Cup, tourism and the recent influx of migrants and international language students who are injecting increased demand into the business community."

There was no reason why the fizz could not continue, he said, "if we are smart and keep international students coming to Auckland and we also retain the America's Cup".

"I see Auckland's challenge as to show the rest of New Zealand that we can lock in and sustain our economic optimism well into next year."

The only really negative aspect of the survey was a further rise in the number of firms having difficulty recruiting staff.

Forty-four per cent said it was harder to find skilled staff, up from 39 per cent in the previous quarter and 33 per cent a year before.

The problem was particularly severe in tourism and hospitality, where 79 per cent of businesses reported recruiting problems, a huge increase on the 41 per cent in the previous survey.

The wholesale-distribution, technology-communications and professional services sectors also reported significant problems.

Barnett said the worsening skills shortage was "in grave danger of becoming an entrenched barrier against the region's aspiration to lift living standards and lock in a sustainable high-performing economy".

The results of this latest survey, which merely underlined earlier findings, should "have the alarm bells ringing", he said.

"If the Government has pretensions of creating a knowledge-based economy and getting sustainable growth about 4 per cent a year, it is very apparent that they have a lot of work ahead."

Barnett said the survey should also act as a signal to businesses to plan ahead to meet their staff needs.

Business plans for next year should include " investment in training programmes, making use of key recruitment networks - including offshore - and using the Chamber of Commerce's NewKiwis scheme".