A survey of over a thousand businesses carried out by the Auckland Chamber of Commerce this week discovered business confidence in Auckland has fallen to new lows.

Rising costs and declining profits are causing headaches for many businesses. The biggest concern of Chamber Chief Executive Michael Barnett was the continued use of interest rate hikes to slow down the economy. He commented,

“I simply repeat my message after the last survey three months ago. The big issue is that New Zealand needs to respond aggressively to these worsening conditions with a long-term strategy and not just batten down the hatches because the conditions have got tough.”

Businesses were also concerned that the strength of the NZ dollar was becoming “too much to handle” for many exporters and that competition from China’s “rock bottom” labour costs was resulting in lost orders.

The Survey

· 42% of firms believe it will be harder to employ the right people with the right skills. The sectors most affected include the trades, tourism & hospitality, manufacturing and professional services.

· Just 8% of firms believe conditions for businesses in general will improve in the next six months. 57% believe conditions for business will worsen over the next six months, compared with 55% in the previous September survey and just 8% in March 2002.

· 36% of firms believe conditions for their own individual business will improve. 63% of firms believe conditions for their own individual business will stay the same or get worse.