Ventu ture Taranaki: Results of f th the June 2020 Business Su Survey
Taranaki Business Survey • Monitors economic confidence by Taranaki enterprises and their views on key business issues • Undertaken by Venture Taranaki 6-monthly since 1999 • Sent to over 1700 enterprises; cross-section of industry type, location, size • Standard economic questions, plus a special topic: COVID-19 impacts and learnings • Timing – undertaken just as the nation shifted to Alert Level 1
ECONOMIC CONDITIONS| NEW ZEALAND NZ economic outlook - next 12 months The majority of 60% respondents do not have a 51.2% 50% positive outlook on the national economy over the 40% next 12 months. 29.3% 30% Improve – 32.2% 20% Remain the same – 30.5% 10.3% 9.2% 10% Deteriorate – 31% Don’t know – 6.3% 0% Improve Remain the same Deteriorate Don't know
ECONOMIC CONDITIONS| NEW ZEALAND NZ economic outlook - next 12 months Sharp increase in view that Improve Remain the Same Deteriorate Don't know 70% economic outlook will deteriorate - 51% of 60% respondents, compared to 50% 22% previously. 40% 30% 20% More uncertainty around 10% the economic outlook than we have seen historically. 0% Nov-07 Apr-08 Sep-08 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 May-15 Oct-15 Mar-16 Aug-16 Jan-17 Jun-17 Nov-17 Apr-18 Sep-18 Feb-19 Jul-19 Dec-19 May-20
ECONOMIC CONDITIONS| IN INDUSTRY OUTLOOK Industry outlook - next 12 months Similar to NZ outlook, Improve Remain the Same Deteriorate Don't know 70% increasing sentiment 60% towards industry 50% deterioration in the 40% coming 12 months. Improve – 32.2% 30% 20% Remain the same – 30.5% 10% Deteriorate – 31% 0% Nov-07 Apr-08 Sep-08 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 May-15 Oct-15 Mar-16 Aug-16 Jan-17 Jun-17 Nov-17 Apr-18 Sep-18 Feb-19 Jul-19 Dec-19 May-20 Don’t know – 6.3%
ECONOMIC CONDITIONS| TARANAKI OUTLOOK Regional outlook - next 12 months Mixed results concerning 45% Taranaki’s economic 39.7% 40% outlook over the next 12 35% 28.7% months. 30% 23.6% 25% Improve – 28.7% 20% Remain the same – 23.6% 15% Deteriorate – 39.7% 10% 8.1% Don’t know – 8.1% 5% 0% Improve Remain the same Deteriorate Don't know
ECONOMIC CONDITIONS| NZ vs IN INDUSTRY Conditions over the next 12 months Respondents feel more 60% positive about their own 51.2% 50% industry outlook as opposed to the national or regional 39.7% 40% economic outlook. 32.2% 31.0% 30.5% 29.3% 28.7% 30% Respondents identify the 23.6% greatest deterioration will 20% take place in the national 10.3% 9.2% 10% 8.1% 6.3% economy compared to their own industry and regional 0% Improve Remain the Same Deteriorate Don’t Know economy. New Zealand Own Industry Taranaki
ECONOMIC CONDITIONS| SALES FORECAST Sales outlook - next 6 months Sales forecast less Improve Remain the Same Deteriorate Don't know 70% confident for the next 6 months. 60% 50% Improve – 36% (was 47%) 40% Remain the same – 36% 30% (was 37%) 20% Deteriorate – 19% (was 8%) 10% Don’t know – 9% (was 6%) 0% Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Nov-17 Mar-18 Jul-18 Nov-18 Mar-19 Jul-19 Nov-19 Mar-20
ECONOMIC CONDITIONS| TARANAKI BUSINESS CONCERNS Factors that have the largest impact on Taranaki enterprises Greatest concern: 25% 23% Ongoing/unknown impacts 20% 19% of COVID-19 (23%) 15% Others: 11% 10% 10% 10% 10% 9% 8% • 8% Declining market 7% 5.95% 5% • 2.98% Costs of business 2% 2% 0% 0% • Weather
ECONOMIC CONDITIONS| FACTORS • “Now focusing more on the local market while the borders are indefinitely closed” • “International events impacting on overall economy” Travel/borders • “Impact of COVID border restrictions on ability to travel to execute business” • “Uncertainty in the industry” • “Reduced sustainability funding confidence” Confidence • “More concerned that we do not get a repeat of what has been, as economy would be destroyed” • “Many of our supplying businesses have not adapted well … a lot will be going out of business” • “Finance options have changed but opportunities to source elsewhere have increased” New opportunities • “I am anticipating getting more market share as competitors struggle with post - COVID environment”
ECONOMIC CONDIT ITIONS| EMPLOYEE NUMBERS NEXT 6 MONTHS Employment outlook Majority anticipate Increase Remain the Same Reduce Don't know holding firm on staff 90% 80% numbers. 70% From the last survey we 60% are seeing an increased 50% 40% confidence in enterprises 30% being able to retain staff, 20% although not increase 10% staffing numbers. 0% Nov-07 Apr-08 Sep-08 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 May-15 Oct-15 Mar-16 Aug-16 Jan-17 Jun-17 Nov-17 Apr-18 Sep-18 Feb-19 Jul-19 Dec-19 May-20
ECONOMIC CONDITIONS| SKILLS SHORTAGE OR DIF IFFICULTY HIR IRING? Skill shortages 79% - do not currently Yes there is a skill shortage No skill shortage 100% experience skill 90% shortages. 80% 70% This is the highest 60% confidence in the ease of 50% 40% hiring appropriately 30% skilled staff since 20% December 2016. 10% 0% Nov-07 May-08 Nov-08 May-09 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Nov-19 Jun-20
ECONOMIC CONDITIONS| SKILLS SHORTAGE MENTIONED • “People with the right attitude and willing to work” • “Require skilled staff which takes 2/3 years to attain a commercially viable level” • “Lack of skilled professional pool in Taranaki” • “Young staff don’t want to work” • “We need an extra but will wait until business returns to a little normality” • “These days it is the young with the skill. But with the skill is not practical experience. Following that when you employ and train them up, they leave and head elsewhere for newer opportunities”
SPECIAL TOPIC IC | COVID ID-19 IM IMPACT CTS AND LEARNINGS
SPECIAL TOPIC: COVID-19| PANDEMIC RESPONSE New Zealand’s handling = 3.95 stars New Zealand’s handling of the COVID -19 pandemic, including (out of 5) decisions this country has made concerning lockdown, information provision and support? Taranaki’s handling = 3.89 stars (out of 5) Taranaki’s handling and response to the COVID -19 pandemic, including the lockdown phases, information and support?
SPECIAL TOPIC: COVID-19| ENTERPRISE IM IMPACTS Impact of COVID-19 on enterprises 45% - significantly 50% 44.7% 45% impacted by COVID-19, 40% but were confident in 35% their ability to recover. 30% 25.2% 25% 20% 15.7% 16% of respondents not 15% 8.2% 10% significantly impacted by 6.3% 5% COVID-19. 0.0% 0% Significant setbacks but Some setbacks but back Not significantly Devastated and unsure if Increase in trade and No longer trading will recover to normal impacted will continue opportunities
SPECIAL TOPIC: COVID-19| AREAS IM IMPACTED Top three areas impacted by the COVID-19 pandemic The top three areas of 70% 64.4% business most impacted: 60% 50% 1. Revenue slowing or 39.4% 37.5% 40% ceasing 30% 20.0% 20.0% 20% 2. Stress and anxiety 13.1% 10.6% 10.0% 8.1% 8.1% 8.1% 10% 1.9% 0.6% 3. Cashflow difficulties 0%
SPECIAL TOPIC: COVID-19| REMOTE WORKING Percentage of enterprises that shifted to working 48% of Taranaki remotely/virtually (all or in part), during Levels 4 and/or 3 60% enterprises surveyed shifted to remote/virtual 50% 47.8% 40.9% working during Alert 40% Levels 4 and 3. 30% 41% of enterprises 20% surveyed did not shift to 11.3% 10% remote/virtual working. 0% Yes No Other
SPECIAL TOPIC: COVID ID-19| IN INFRASTRUCTURE ADAPTABILITY How did enterprises infrastructure adapt to remote / virtual working 39% of enterprises reported 45% the transition to remote 39.1% 40% working had a low impact 34.6% 35% given their infrastructure. 30% Those that answered ‘other’ 25% had only part of their 20% 16.5% enterprise working 15% remotely, and the other 10% 8.3% already had flexible work 5% 1.5% practices in place. 0% Low impact Moderate impact High impact Other Not applicable given the nature of work
SPECIAL TOPIC: COVID ID-19 | ORGANISATIONAL CULTURE When asked how their enterprise’s organisation culture adapted to the change of virtual/remote working, the following responses were received: • “Badly, very time consuming for little reward” • “No change, the external social aspect however was affected” • “Really well. Created excellent communication streams, which I think helped with team moral” • “We adapted quickly and made sure we scheduled regular catch -ups and virtual social events outside work hours – had competitions etc.” • “There is no way we could sustain that for a long period of time” • “We experienced some cultural disconnect and isolation and had to regularly check in on our peoples’ wellbeing”
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