SI businesses more optimistic after quake

Photo / Sarah Ivey South Island businesses are more optimistic after the Canterbury earthquake.

South Island business leaders hammered by the Canterbury earthquake, the collapse of South Canterbury Finance and severe snow storms, are feeling more optimistic than they were before the events.

A survey conducted by Polson Higgs and McCulloch and Partners, compared the results with a previous survey conducted at the end of August - its aim to examine whether the events had affected business confidence and growth expectations.

Profitability expectations have edged up, with 51 per cent of respondents expecting profitability to increase, compared with 47 per cent previously.

Michael Turner, a partner at Polson Higgs said the survey results were an encouraging sign.

"Sometimes a negative event can lead to negative sentiment and that negative sentiment can be a bit self fulfilling.

"It's encouraging to see a few weeks after the event that people are getting on with business as usual or seeing the opportunities that the event/s have created."

In the August survey 52.5 per cent of businesses expected competition to increase. This dropped to 45 per cent in the latest results.

Michael Rondel, a partner in Polson Higgs, said the result demonstrated the resilience of South Island business leaders to adapt to a changing environment.

The slight decline in competition is reflected in the expectations of an increase in profitability, he said.

The results showed more people (from 30 per cent to 50 per cent) were planning to get professional advice during the next 12 months.

This was unsurprising given there was usually a 'turn' to people in the accounting and legal sectors, as well as surveyors, and valuers when there had been a loss in profit, Turner said.

IT infrastructure continued to be a primary focus for businesses, with 58 per cent of respondents saying they planned to increase their investment in infrastructure, up from just over half previously.

One of the biggest changes was the cost of finance, which increased from 84.9 per cent in the August survey, to 74.5 per cent, the survey said.

There were 67 respondents to the survey and a similar number to the previous survey, which was sent out to 300 South Island businesses.

- NZ HERALD ONLINE