Marlborough a cocoon of economic confidence

An air of confidence appears to surround Marlborough's economy, with businesses more optimistic about conditions there than nationally.

A new Marlborough Chamber of Commerce business confidence survey shows one-third of businesses rate the regional economy "moderately or substantially better" than six months ago.

That compares with 54 per cent of Marlborough enterprises who think the national economy is "moderately worse or substantially worse" than six months ago.

About one-fifth of businesses believe the regional economy is worse than half a year ago and 12 per cent think national conditions are better.

The relatively optimistic trend -- slightly at odds to confidence patterns being described nationally -- has not been dented by a recent slowing in annual economic growth in the top of the south.

Growth in that area slowed to about 2.9 per cent for the year to March, down from highs of 4.6 per cent reached in the middle of last year, according to the National Bank.

Recent figures released by Statistics New Zealand indicate many parts of Marlborough's economy are still running strong though.

They show, for example, that both retail sales for the March quarter and total GST sales for the previous three months were up nearly 10 per cent compared with 12 months prior.

Chamber chief executive Jane Tito said the "steady" level of business confidence in Marlborough was interesting given various trends now pressuring the economy.

They included labour and skills shortages, the high New Zealand dollar, and uncertainty surrounding the upcoming general election.

Skills shortages were identified as the major concern facing businesses in Marlborough, but nearly 80 per cent of firms hoped to overcome the problem by investing in further training for their staff.

More than half also planned to invest in new technology as a way to limit problems associated with the shortage of skilled labour.

The shortage of workers has helped pushed average hourly earnings in Marlborough up 4.6 per cent to $18.39 in the same quarter compared with a year ago.

More than two-thirds of businesses surveyed by the chamber are not expected to fork out large sums of money on new plant or equipment during the next year -- in contrast to heavy investment nationally.

Recent surveys in other parts of the country have shown businesses are starting to feel the pinch and experts are warning the economy is only being saved from recession by the strong housing market and high employment.

- nzpa