Taranaki Business Survey
RESULTS OF THE May/June 2018 SURVEY
Taranaki Business Survey • Monitors economic confidence by Taranaki businesses and their views on key business issues. • Undertaken by Venture Taranaki 6-monthly since 1999. • Survey sent to over 1500 Taranaki businesses. • Cross section of industry type, location and size. • Spans a number of standard economic questions. • Plus special topics: – Lower carbon economy future; – O&G off shore exploration – policy shift – Budget 2018
NZ Economic Conditions: next 12 months New Zealand Economy - next 12 months Improve
Remain the Same
Deteriorate
May 2018 Continual fall in business confidence
Unsure
70%
60%
50%
40%
30%
20%
10%
Nov-17
Mar-18
Jul-17
Mar-17
Jul-16
Nov-16
Nov-15
Mar-16
Jul-15
Mar-15
Jul-14
Nov-14
Nov-13
Mar-14
Jul-13
Mar-13
Jul-12
Nov-12
Nov-11
Mar-12
Jul-11
Mar-11
Jul-10
Nov-10
Mar-10
Jul-09
Nov-09
Nov-08
Mar-09
Jul-08
Mar-08
Nov-07
0%
• Same: 47% (down from 53%) • Improve 19% (down from 21%) • Deteriorate – 31% (was 20%) • Don’t know: 3%
Industry conditions: next 12 months Industry conditions - next 12 months Improve
Remain the Same
Deterioriate
Unsure
70%
Confidence in industry outlook also declines
60%
50%
• Remain same 47% (down from 49%) • Improve 29% (down from 30%) • Deteriorate 23% (was 16%) • Don’t know: 1%
40%
30%
20%
10%
Mar-18
Nov-17
Jul-17
Mar-17
Jul-16
Nov-16
Mar-16
Jul-15
Nov-15
Nov-14
Mar-15
Jul-14
Mar-14
Nov-13
Jul-13
Mar-13
Jul-12
Nov-12
Nov-11
Mar-12
Jul-11
Nov-10
Mar-11
Jul-10
Mar-10
Jul-09
Nov-09
Mar-09
Jul-08
Nov-08
Nov-07
Mar-08
0%
Sales: next 6 months Sales outlook - next 6 months Improve
Remain the Same
Deteriorate
Head winds anticipated for sales next 6 months?
Unsure
70%
60%
50%
• Improve: 36% (was 45% last time) • Remain same: 43% (42% previously) • Deteriorate: 18% (up from 9%) • Don’t know: 3%
40%
30%
20%
10%
Jun-18
Dec-17
Jun-17
Dec-16
Jun-16
Dec-15
Jul-15
Dec-14
Jun-14
Dec-13
Jun-13
Dec-12
Jun-12
Dec-11
Jun-11
Dec-10
May-10
Dec-09
May-09
Nov-08
May-08
Nov-07
0%
Taranaki business: concerns High concern
Factors Impacting growth June 2018 3
2.5
2
1.5
1
0.5
Low concern
0
What’s changed? What's changed since December 2017 June 2018
Dec 2017
3 2.5 2 1.5 1 0.5 0
Petrol/Fuel
Factors
impacting on business • •
•
•
•
“Higher prices for stock with lower returns” Wages – “Minimum wage is too high for school leavers wanting a job and unskilled workers”. – “Pay equity for care staff increase” Political – “The Government will run out of money and Taranaki will be one of the region’s to suffer” Oil/Gas and Dairy – “Oil and gas industry slow down and low dairy pay outs seem to affect retail trends” – “Oil and gas decision has made an immediate negative impact – and will already be influencing decision makers around staffing, investment etc. Alternatives are by no means clear cut, nor a silver bullet” Transportation costs increasing – due to increasing fuel/reducing service providers – increasing cost of exporting.
Employee numbers – next 6 months
Improve
Remain the Same
Deterioriate
Potential head winds … leading to potential employment challenges?
Unsure
90% 80% 70%
69% anticipate employment levels to remain the same.
60% 50% 40%
15% - increase.
30% 20%
Now on par ….
10%
Jun-18
Dec-17
Jun-17
Dec-16
Jun-16
Dec-15
Jun-15
Dec-14
Jun-14
Dec-13
Jun-13
Dec-12
Jun-12
Dec-11
Jun-11
Dec-10
Dec-09
May-10
May-09
Nov-08
Nov-07
May-08
May-07
0%
15% expect staff numbers to decrease
Skill shortages or difficulty hiring? Skill Shortages Yes
No
100.00%
66% - no skill
90.00%
shortages
80.00% 70.00%
34%
60.00%
of Taranaki businesses report skill shortages or difficulties recruiting appropriate staff.
50.00% 40.00% 30.00% 20.00% 10.00%
Jun-18
Dec-17
Jun-17
Dec-16
Jun-16
Dec-15
Jun-15
Dec-14
Jun-14
Dec-13
Jun-13
Dec-12
Jun-12
Dec-11
Jun-11
Dec-10
May-09
Nov-08
May-08
Nov-07
0.00%
Skills shortages mentioned Agriculture • “agribusiness sector has been struggling to attract people resources for a number of years so not a new problem”. • Suitable sales people for agriculture area. Hospitality • Experienced wait staff • Bar staff with liquor licence Health • Senior doctors and clinical staff • Specialist rehabilitation professionals
• Experienced, qualified valuers • Specialist engineers Trades • Gas fitters • AC Technician • Truck drivers • Mechanics
IT • Graphic designers • Hardware specialist
Special Topic: Taranaki and the transition to a lower carbon economy
Context • • • • •
Concern for climate change Need to reduce greenhouse gas emissions Transition toward a low emission economy Productivity Commission Report Zero Carbon Bill
Should New Zealand be actively seeking ways to:
reduce its greenhouse gas emissions and
transition towards a lower-emission economic future, while preserving/growing incomes and wellbeing?
Support for the shift to low emission future Should NZ be actively seeking ways to transition to a low emission future, while preserving/growing incomes and wealth? 60.0
49.5
50.0
40.0
30.0
22.9 20.0
13.8 10.0
7.34
5.5 0.92
0.0 Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree
Unsure/Don't know
What do you believe is the most important step that could be taken for
Taranaki to reduce overall greenhouse gas emissions?
Steps for Taranaki
to reduce overall greenhouse gas emissions • “Develop a plan, start giving thought”
• “Ensure a strong consultative process between local stakeholders and Govt – this hasn’t happened and is a major error by current coalition” • “Look at alternative power, solar” • “Electric cars”, “remove old cars not up to standard”, “public transport” • “More trees”, riparian planting • “Reduce waste”, • “Consumers need to take responsibility” • “Change farming practices”, “reduce stock numbers”, • “Gas to replace coal”
The Government recently announced no new permits will be awarded for off shore oil and gas exploration.
Do you think this policy is a step in the right direction for lowering greenhouse gas emissions?
Over 60% Disagreed/strongly disagreed The Government recently announced that no new permits will be awarded for off shore O&G exploration. Is this a step in the right direction for lowering greenhouse gas emissions? 45
39.81
40 35 30 25
21.3
21.3
20 15 10
7.41
6.48 3.7
5 0 Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree
Unsure/Don't know
Has the Government’s announcement to grant no new offshore exploration licences impacted your business?
25% - no impact 21% - already impacted Circa 50% anticipate impact Has the change in off shore O&G policy impacted your business? 30.0
28.0 25.23
25.0 20.6
20.56
20.0
15.0
10.0 5.61 5.0
0.0 Yes
Not yet, but likely to in the medium term (2-5 years)
Not yet but likely to in the long term (5+ years)
No impact is anticipated
Unsure/other
Comment • “Less high paying jobs or reduced growth will result in top end property and housing market becoming weak at some point”. • “There will be a loss of confidence with clients purchasing gas appliances”. • “We provide accommodation for a lot of those workers but with no new licences issued there will be less and less workers making use of our services”. • “Loss of business confident is apparent”. • “The decision is likely to have an immediate impact on staffing and investment decisions”. • “No impact as long as the region focuses on new areas of growth”. • “Doesn’t have to be negative. What about positive impact?”
New Zealand’s emissions profile differs markedly from other developed countries due to our high level of agricultural emissions.
What changes, if any, do you think will be necessary for the agricultural sector to reduce greenhouse gas emissions?
Agriculture • “Research into how emissions change with genetics, diet, pasture management” • “Technology development so less methane is produced by animals, sell it to the world (but not the IP!)” • “Less cows and sheep, more forest, lower stock numbers” • “Move to mixed farming e.g. other land use options” • “Move to barn raising animals – allowing for capture of gasses and waste, which could be used for electricity/energy generation” • “No change required” • “Agriculture is not to blame as much as other businesses”.
The transport sector is also an important contributor to New Zealand’s greenhouse gas emissions. Widespread adoption of electric powered vehicles may be an important step in reducing greenhouse gas emissions.
Do you see you/your company shifting to electric vehicles in the future?
4% - have electric vehicles 27% - no 24% - unsure 49% - Yes but only 5% in the near term Do you see you/your company shifting to electric vehicles in the future? 30 26.85
25.93 24.07
25
20 14.81
15
10
5
3.7
4.63
0 We already operate electric vehicle
Yes - in the near future
Yes - in the medium term (2-5 years)
Yes - in the long term (5+ years)
Unsure/don’t know
No
Biggest barriers to more electric vehicles being used in NZ? Upfront costs (relative to petrol/diesel cars)
55.05
Limited travel range/associated range anxiety
53.21
Lack of public charging infrastructure
49.54
The range of vehicles currently available
40.37
Limited Govt incentives
31.19
Length of charging time
30.28
Lack of public awareness and understanding
16.51
Other
13.76 0
10
20
30
40
50
60
Electric cars: comments • “What about disposal of all the used batteries”? • “What about the production of power to run these cars? And overloading of electrical supply”? • “The carbon footprint to produce these electric vehicles FAR out ways the emissions from fossil fuels. Weakens the reasoning to push for a switch”. • “True cost of electric vehicles taking into account battery recycling, exploiting child labour in the mining of minerals, larger requirements for electric infrastructure, fake marketing”! • “Seems convenient to overlook what EVC’s are made of? Steel, rubber, glass – all fossil fuel reliant”. • “Can you lease them”? • “Technology is still in its infancy”
Comments: Transitioning to a low-emissions economy • “NZ is such a small part of the global picture, that making rash decisions to look good internationally is not worth wrecking our economy over”. • “It is vital we accept what has done the damage and immediately start of journey to improve all areas where this has happened” • “Somehow this needs to be depoliticized if we are to make genuine process, all points of the political spectrum need to be involved. All parts of the community need to realise the challenge is real and potentially look to the opportunities that might evolve”
2018 Budget • Your views: – Will the budget help: • Your Business? • Regional economy? • NZ economy?
– Likes? and Dislikes? – Rating (out of 5)
Impact of Budget on Business, Regional Economy and National Economy
Business
Region
NZ 80
70.19 70
60
43.27
44.23
50
46.15
41.35 40
30 23.08 20 12.5
12.5 6.73
10
0
Weaken
No impact
Stimulate
Feedback: Likes: • • • • • •
Health Education Infrastructure Housing Social issues Policies e.g. reduce waste • Low emission
Dislikes: • • • • • • • • • • • •
Disjointed, no real focus; just fighting fires. Nothing ground-breaking Rate of change and lack of planning Teachers and nurses underpaid Will need more taxes to fund everything Window dressing, taking existing programmes and policy- repackaging them as new initiatives. Amount of aid given overseas Building incentives – builders windfall not first home buyers Not much to help business growth R&D tax incentives - limited benefit to SME’s Oil and dairy demise Minimal support for Māori
Your Rating
2.4/5
Benchmark on previous years Rating of budget 3.5
3.23
3.15 2.96
2.88
3
2.4
2.5
2
1.5
1
0.5
0
2011
2012
2013
2014
2015
2018
Implications for Taranaki • Headwinds • Transition and change • Future prospects
The Mission “Taranaki - where talent becomes enterprise” ‘Kia eke panuku’
Making people the centre of development
STRATEGY
VISION:
ATTRACTIVE LIFESTYLE
TALENTED PEOPLE
MODERN, HIGH-VALUE ECONOMY
GOALS:
The Taranaki lifestyle offering retains and attracts people
Taranaki is a place where talented people want to live and work
Taranaki has the highest proportion of technologyenabled and digitally-focussed enterprises in regional NZ
VALUES:
Whanaungatanga: Relationships The people of Taranaki are at the heart of this strategy
Kaitiakitanga: Guardianship Sustainability of our natural environment is paramount
Tuakana teina: Succession Thinking long term, preparing for the next generation
TAPUAE ROA MAKE WAY FOR TARANAKI
Action Plan and Delivery FUTURES
ACTION PLAN
FOUNDATIONS
ENERGY FUTURES
TALENT, ENTERPRISE & INNOVATION
MÄ€ORI ECONOMY FUTURES
ACCESS AND CONNECTIVITY
FOOD FUTURES
VIBRANCY AND LIVEABILITY
VISITOR SECTOR FUTURES
INVESTMENT
DELIVERY LEADERSHIP AND OVERSIGHT
MAYORAL FORUM / IWI / VENTURE TARANAKI / COUNCILS/ FUNDING AND DELIVERY Local councils, regional council, central government, iwi, business, private investors, trusts and philanthropic organisations and individuals.
TAPUAE ROA MAKE WAY FOR TARANAKI
Thank you! www.taranaki.info for more