Taranaki Business Survey
RESULTS OF THE DECEMBER 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 1500 Taranaki businesses. • Cross section of industry type, location and size. • Spans a number of standard economic questions. • Plus special topics: – 2018 – highlights; challenge – Change and transition – Future regional economy and lifestyle
NZ Economic Conditions: next 12 months NZ Economic Outlook - Next 12 months Improve
Remain the same
Deterioriate
Downturn ebbs from peak?
Don't know
70%
60%
50%
But confidence remains weak
40%
30%
20%
10%
Sep-18
Apr-18
Nov-17
Jun-17
Jan-17
Aug-16
Mar-16
Oct-15
May-15
Dec-14
Jul-14
Feb-14
Sep-13
Apr-13
Nov-12
Jun-12
Jan-12
Aug-11
Mar-11
Oct-10
May-10
Dec-09
Jul-09
Feb-09
Sep-08
Apr-08
Nov-07
0%
• Same: 53% up from 47% • Improve: 18% down from 20% • Deteriorate: 24% was 31% • Don’t know: 5%
Industry conditions: next 12 months Industry Outlook - Next 12 months Improve
Remain the same
Deteriorate
Downturn ebbs. Confidence ebbs. The status quo of change now the new normal?
Don't know
70%
60%
50%
40%
30%
20%
10%
Nov-18
Jul-18
Mar-18
Jul-17
Nov-17
Nov-16
Mar-17
Jul-16
Mar-16
Jul-15
Nov-15
Nov-14
Mar-15
Jul-14
Mar-14
Jul-13
Nov-13
Mar-13
Jul-12
Nov-12
Nov-11
Mar-12
Jul-11
Mar-11
Jul-10
Nov-10
Nov-09
Mar-10
Jul-09
Mar-09
Jul-08
Nov-08
Nov-07
Mar-08
0%
• Remain same: 52% up from 47% • Improve: 24% down from 29% • Deteriorate: 22% was 23% • Don’t know: 3%
Sales: next 6 months Sales Outlook - Next 6 months Improve
Remain the same
Deterioriate
Don't know
Sales following similar pattern of market readjustment?
70%
60%
50%
40%
• Improve: 36% down from 45% • Remain same: 54% 43% previously • Deteriorate: 12% down from 18% • Don’t know: 3%
30%
20%
10%
Nov-18
Jul-18
Mar-18
Jul-17
Nov-17
Mar-17
Jul-16
Nov-16
Nov-15
Mar-16
Jul-15
Nov-14
Mar-15
Jul-14
Mar-14
Jul-13
Nov-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%
Taranaki business: concerns High concern
Factors impacting on business 3 2.5
2 1.5 1 0.5 0
Low concern
Cost of business and securing good staff are key concerns
What’s changed? What's changed since trhe last survey June 2018
Dec 2018
3
2.5
Petrol/Fuel
2
1.5
1
0.5
0
Priorities and concerns remain largely unchanged.
Other Factors
Impacting on Business • “Govt policies impacting O&G, reducing high earners & spending” • “General market uncertainty is destroying confidence, delaying decisions” • “Declining confidence in dairy. Finance getting tighter” • “All costs going up, including price of water” • “The increase in the minimum wage - gap between that and our lower paid jobs is smaller, harder to attract staff” • “Demographics of clients – too many retirees still in business” • “Transport – domestic flight options decreasing, and bus links to Auckland/Wellington are limited – difficult to expand tourism” • “Increasing Govt regulation”
Employee numbers – next 6 months Employment Outlook Increase
Remain the same
Decrease
Don't know/unsure
90%
Employment holding firm – with possibilities of some short term growth?
80%
70%
60%
50%
65% anticipate employment levels to remain the same.
40%
30%
24% expect staff to increase
20%
10%
9% expect staff to decrease Sep-18
Apr-18
Nov-17
Jun-17
Jan-17
Aug-16
Mar-16
Oct-15
Dec-14
May-15
Jul-14
Feb-14
Sep-13
Apr-13
Nov-12
Jun-12
Jan-12
Aug-11
Mar-11
Oct-10
May-10
Dec-09
Jul-09
Feb-09
Sep-08
Apr-08
Nov-07
0%
Skill shortages or difficulty hiring? Skill Shortages Yes
No
100.00% 90.00% 80.00%
65% - no skill
70.00%
shortages
60.00%
35%
of Taranaki businesses report skill shortages or difficulties recruiting appropriate staff.
50.00%
40.00% 30.00% 20.00% 10.00%
Dec-18
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 “Staff that turn up consistently with a good attitude to work” Health: • Clinical staff, doctors, nursing, health care staff
Hospitality: • Food & beverage; kitchen staff • Good hospitality staff, along with limitations on working visas
Trades • • • • • • • • • •
Qualified auto machinists IT engineers Software developer Permit issuers Mechanical technicians Plumbers, gas fitters, drain layers Skilled drivers Forklift drivers Diesel mechanics Qualified trades staff
Special Topic: Change and transition in the regional economy
Context • 2018 – reflections • Pivotal time of change? • Looking ahead: – Taranaki in 10 years – Sectors facing change – New possibilities
• Taranaki in 2050
2018 – Economic Challenges • Govt stopping issuing new oil and gas permits – “Oil/gas impacts across the board re: spending” – “O&G ban without a viable alternative” – “Diversifying away from the oil industry”
• “Adjusting to the new coalition policies” • “Govt commitment to the regions – mixed messages” • Agriculture – – – –
• • • •
“Fonterra/Dairy payout/being down – reduced confidence” “Stopping the environmental impact of farming on our rivers” “Risk of M. bovis hitting our farmers” Weather-related challenges to agricultural sector
Yarrows stadium Employment, ageing workforce “Hawera/Taranaki voted an unattractive place to live” Roading impact on transportation of goods
2018 – Economic Highlights • Infrastructure: – Mount Messenger/SH3 improvements announced – Major roading funding
• Primary sector - dairy production is up 5-10% • Taranaki lifestyle and attractions – People relocating to Taranaki – Attracting tourists – Events such as garden festival
• Investments/projects – Methanex turnaround investments – 8 Rivers potential – Airport extension/expansion
• New and emerging businesses developing
Is the region at a pivotal time of change? How strongly do you believe that the region is at a pivotal time of change? 50 44.9
45 40 34.69
35 30 25 20
14.29
15 10
5.1
5 0
1.02 0
Unsure/don't know
Strongy disagree
Disagree
Neither agree or disagree
Agree
Strongly agree
Industries facing biggest change in next 10 years Industries facing the greatest challenges over the next 10 years 6.0 5.3 5.0
3.8
3.1
3.2
4.0
3.3
2.8
3.0
2.0
1.0
0.0
education
Transport
Tourism
Manufacturing Agriculture/food production
Energy
Taranaki business environment in 10 years Taranaki business environment - in 10 years time 35.0 31.6 30.0
25.5 25.0
19.4
20.0
15.0
13.3 10.2
10.0
5.0
0.0
A much less attractive business environment
Slightly less attractive
About the same
Slight more attractive place
A much more attractive business environment
Taranaki’s lifestyle destination in 10 years Taranaki lifestyle destination - in 10 years 35.0
33.0 30.9
30.0
25.0 21.7 20.0
15.0
10.0
8.3 6.2
5.0
0.0
A much less attractive lifestyle destination
Slightly less attractive
About the same
Slight more attractive place
A much more attractive lifestyle destination
Taranaki in 10 years time will there be life as we know it? Within the next 10 years, do you believe the following will occur in Taranaki
Horticulture or alternative land crops will be far more prevalent Industry/major companies in Taranaki will be very different Hydrogen will be readily used as a transportation fuel There will be a major shift in ways we use Taranaki land. Businesses will using drones for transport of product/supplies Self-driving autonomous cars will be trialled in Taranaki A vaccine will inhibit methane gas production in cows Automation/Robotics/AI will replace part of my job 0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Other changes that may happen… • “Taranaki will either not have a tertiary education provider or we will have a significantly improved and more relevant one” • Population – Increased population – Static population growth relative to rest of NZ – May revert to rural obscurity
• Shift in finance and transport to rely heavily on blockchain technology for payment solution, product tracking and product authentication. • Infrastructure: Roading, runway extension • Technology: “People will need more support to navigate the proliferation of online services” • Energy – Greater focus on renewable energy production – Shortages of gas for industry
Other changes that may happen… • “Social expectations of sustainability will grow markedly” • Climate: – – – –
“Dramatic weather events With sea level rising, most of Taranaki’s beaches will disappear More cropping on land Climate change will have a significant impact on all sectors through extreme weather events, coastal erosion, agricultural practices, dislocation of populations and security”
• “Greater appreciation for cultural aspects of Taranaki – to attract and enrich visitor and resident experience”. • Work and business – Move to 4-day work week – High unemployment – More business diversity
• More pressure on welfare state e.g. geing/superannuation
In 2050 Taranaki will be ‌. Taranaki in 2050 will be: 40.0 35.7
35.7 35.0
30.0
25.0
20.0
15.3 15.0
7.1
10.0 6.1 5.0
0.0
A much less attractive place than today
Slightly less attractive
About the same
Slight more attractive place
A much more attractive place than today
Back, before the future
Tourism up 70% from 389,129 guest nights for YE Sept 2002 to 665,429 guest nights YE Sept 2018
Net migration from a net loss of 576
in 2001
to a net gain of almost 550
in 2018
25% more employees and 20% more businesses since 2000
Construction up 200% from 2001
The last words… • “This is new territory for all” • “Stop the media reporting doom and gloom”
• “This is a long term global meltdown. The power base is changing” • “The new Government should change things”
• “We are lucky. It could be a lot worse” • “To all New Zealanders - "chin up" - don't look back or grumble - move ahead”
• “Keep up the good work”!
The Action Plan In brief
Futures and Foundations The Action Plan is about the ‘how’ How we will achieve the future we want for Taranaki?
ACCELERATION OF THE FOUR FUTURES Food Futures
Visitor Sector Futures
Energy Futures
Maori Economy Futures
ACCELERATION OF THE FOUR FOUNDATIONS Each of the “Four Futures” and “Four Foundations” have developed action plans. The Four Foundations are vital to achieve the Futures.
Talent, enterprise and innovation
Vibrancy and liveability
Accessibility and connectivity
Investment
INCREMENTAL SECTOR GROWTH Dairy
Energy
Engineering
Food Processing
Meat & Poultry
Forestry & Processing
TAPUAE ROA MAKE WAY FOR TARANAKI
Thank you! www.taranaki.info for more