Rugby World Cup and rebuild help lift outlook

Photo / Simon Baker

Expectations of increased economic activity around rebuilding Christchurch and holding the Rugby World Cup has pushed business confidence to a record high, according to the latest BNZ survey.

BNZ chief economist Tony Alexander said the bank's monthly survey found a "very strong" net 57 per cent of respondents expected the economy would be better in a year, well up from last month's net 42 per cent expecting better things for the economy.

"In fact, in the 5 years during which we have been running the survey, sentiment has never before been this high."

However, southern businesses were still struggling while hopeful of better times coming, Otago Chamber of Commerce president Peter McIntyre said yesterday.

The chamber was meeting senior regional business leaders every two or three months to talk about how they were finding business conditions.

"It is still tight out there. In the last two or three years, businesses have cut out all excess and are running lean and mean.

"But a lot of businesses are still struggling with compliance costs and a lot of other burdens being laid on them."

Changes to KiwiSaver had been added to business compliance costs with a push for higher wages for staff, McIntyre said.

Other areas hurting in the region included a slowdown in residential and commercial construction, retailers finding it particularly tough and exporters being hurt by the high dollar.

Fortunately, a strong rural economy was helping towns such as Gore, Balclutha and Alexandra, he said.

Looking ahead, the Rugby World Cup would give the region a boost with the English team based in Dunedin for three weeks.

It was likely Dunedin tradespeople would be in demand for the Christchurch rebuild, McIntyre said.

"As far as business relocation from Christchurch is concerned, at this stage it is minimal, but we have the opportunity in Dunedin to provide a link to help those business wanting to shift to stay in the South Island," he said. "We have excess capacity and a wide range of services."

- OTAGO DAILY TIMES