Venture Taranaki: Results of the June 2020 Business 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 The majority of
NZ economic outlook - next 12 months 60%
respondents do not have a positive outlook on the national economy over the
51.2% 50%
40%
next 12 months. 30%
29.3%
Improve – 29.3% 20%
Remain the same – 9.2% Deteriorate – 51.2% Don’t know – 10.3%
10.3%
9.2%
10%
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
economic outlook will
70%
deteriorate - 51% of
60%
respondents, compared to
50%
22% previously.
40%
Remain the Same
Deteriorate
Don't know
30%
More uncertainty around
20%
the economic outlook than
10%
May-20
Dec-19
Jul-19
Feb-19
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
0%
Nov-07
we have seen historically.
ECONOMIC CONDITIONS| INDUSTRY OUTLOOK Industry outlook - next 12 months
Similar to NZ outlook,
increasing sentiment towards industry
Improve
Deteriorate
Don't know
70%
60%
deterioration in the
50%
coming 12 months.
40%
Improve – 32.2%
30%
Remain the same – 30.5%
20%
Deteriorate – 31%
Remain the Same
10%
May-20
Dec-19
Jul-19
Feb-19
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
Don’t know – 6.3%
Nov-07
0%
ECONOMIC CONDITIONS| TARANAKI OUTLOOK Regional outlook - next 12 months
Mixed results concerning
45%
Taranaki’s economic
40%
outlook over the next 12
35%
months.
30%
Improve – 28.7% Remain the same – 23.6%
39.7%
28.7%
23.6%
25% 20% 15%
Deteriorate – 39.7% Don’t know – 8.1%
10%
8.1%
5% 0% Improve
Remain the same
Deteriorate
Don't know
ECONOMIC CONDITIONS| NZ vs INDUSTRY Respondents feel more
Conditions over the next 12 months 60%
positive about their own industry outlook as opposed to the national or regional
51.2%
50%
39.7%
40%
economic outlook.
Respondents identify the greatest deterioration will
32.2%
30%
29.3%
23.6%
20%
take place in the national
economy compared to their own industry and regional economy.
31.0%
30.5%
28.7%
10.3%
9.2%
10%
6.3%
0% Improve
Remain the Same
New Zealand
Deteriorate
Own Industry
Taranaki
Don’t Know
8.1%
ECONOMIC CONDITIONS| SALES FORECAST Sales outlook - next 6 months
Sales forecast less
Improve
confident for the next 6
70%
months.
60%
Improve – 36% (was 47%)
50%
Remain the same – 36%
40%
(was 37%)
30%
Deteriorate – 19% (was 8%)
20%
Deteriorate
Don't know
10%
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
Don’t know – 9% (was 6%)
Remain the Same
ECONOMIC CONDITIONS| TARANAKI BUSINESS CONCERNS
Greatest concern:
Factors that have the largest impact on Taranaki enterprises 25%
Ongoing/unknown impacts 20%
23%
19%
of COVID-19 (23%) 15%
Others:
• Declining market • Costs of business
11%
10%
10%
10%
10%
9%
8%
8% 7%
5%
5.95% 2.98%
2%
2% 0%
• Weather
0%
ECONOMIC CONDITIONS| FACTORS •
“Now focusing more on the local market while the borders are indefinitely closed”
•
“International events impacting on overall economy”
•
“Impact of COVID border restrictions on ability to travel to execute business”
•
“Uncertainty in the industry”
•
“Reduced sustainability funding 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”
•
“I am anticipating getting more market share as competitors struggle with post-COVID environment”
Travel/borders
Confidence
New opportunities
ECONOMIC CONDITIONS| EMPLOYEE NUMBERS NEXT 6 MONTHS
Employment outlook
Majority anticipate
holding firm on staff numbers.
Increase
Remain the Same
Reduce
Don't know
90%
80% 70%
From the last survey we
60%
are seeing an increased
50%
confidence in enterprises
40% 30%
May-20
Dec-19
Jul-19
Feb-19
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
0%
Sep-08
staffing numbers.
10%
Apr-08
although not increase
20%
Nov-07
being able to retain staff,
ECONOMIC CONDITIONS| SKILLS SHORTAGE OR DIFFICULTY HIRING? Skill shortages
79% - do not currently
experience skill
Yes there is a skill shortage
No skill shortage
100% 90%
shortages. This is the highest
confidence in the ease of hiring appropriately
80% 70% 60% 50% 40%
30%
10%
Jun-20
Nov-19
Jun-19
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
0%
May-08
December 2016.
20%
Nov-07
skilled staff since
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 | COVID-19 IMPACTS AND LEARNINGS
SPECIAL TOPIC: COVID-19| PANDEMIC RESPONSE New Zealand’s
handling = 3.95 stars (out of 5)
New Zealand’s handling of the COVID-19 pandemic, including 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 IMPACTS 45% - significantly
impacted by COVID-19,
Impact of COVID-19 on enterprises 50% 45%
44.7%
40%
but were confident in their ability to recover.
35% 30% 25.2% 25% 20%
16% of respondents not
significantly impacted by
15.7% 15% 8.2%
10%
6.3% 5%
COVID-19.
0.0% 0% Significant setbacks but Some setbacks but back will recover to normal
Not significantly impacted
Devastated and unsure if will continue
Increase in trade and opportunities
No longer trading
SPECIAL TOPIC: COVID-19| AREAS IMPACTED The top three areas of
business most impacted:
Top three areas impacted by the COVID-19 pandemic 70%
64.4%
60%
50%
1. Revenue slowing or ceasing
40%
39.4%
37.5%
30% 20.0%
2. Stress and anxiety 3. Cashflow difficulties
20.0%
20% 13.1% 10%
10.6%
10.0%
8.1%
8.1%
8.1% 1.9%
0%
0.6%
SPECIAL TOPIC: COVID-19| REMOTE WORKING Percentage of enterprises that shifted to working remotely/virtually (all or in part), during Levels 4 and/or 3
48% of Taranaki
enterprises surveyed
60%
shifted to remote/virtual
50%
working during Alert
40%
Levels 4 and 3.
30%
41% of enterprises
47.8% 40.9%
20%
surveyed did not shift to
11.3% 10%
remote/virtual working. 0% Yes
No
Other
SPECIAL TOPIC: COVID-19| INFRASTRUCTURE ADAPTABILITY How did enterprises infrastructure adapt to remote / virtual working
39% of enterprises reported
45%
the transition to remote
40%
working had a low impact
35%
given their infrastructure.
30%
Those that answered ‘other’
25%
had only part of their
20%
39.1% 34.6%
16.5%
enterprise working
15%
remotely, and the other
10%
already had flexible work
5%
practices in place.
0%
8.3%
1.5% Low impact
Moderate impact
High impact
Other
Not applicable given the nature of work
SPECIAL TOPIC: COVID-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”
SPECIAL TOPIC: COVID-19 | ORGANISATIONAL CULTURE
Cont. •
“Well. Accelerated adoption of suitable protocols”
•
“Well and made sure communication was top of list”
•
“Devolved decision making to a cross-function team operating through TEAMS worked well”
•
“With great difficulty”
•
“High trust model worked well in most cases”
•
“Trying to adopt more virtual working in regular times including some staff working from home for the
foreseeable future (less people in the open space office = less distractions)”
SPECIAL TOPIC: COVID-19| REMOTE WORKING Percentage of enterprises considering, or in the process of implementing a remote or virtual work option for all or some staff
Majority - not
considering implementing a remote
60% 54.4% 50%
working option for staff. 40% 27.9%
30%
18% - would consider
28% - N/A - not an
17.7%
20%
10%
option 0% No
N/A
Yes
SPECIAL TOPIC: COVID-19| REMOTE WORKING
Details provided of considered/implemented approach: • “In the process of developing a co-working space in South Taranaki” • “Opportunity for individual staff to work both at home and at the organisation’s locations”. • “Providing remote access via vpn and laptops” • “Flexiweek allowing a proportion of the working week to be worked flexibly including remotely” • “We now have the permanent option of working a few days per week from home if they choose”
SPECIAL TOPIC: COVID-19| BIGGEST RETURN TO WORK CHALLENGES Biggest challenges faced by enterprises as they returned to business after lockdown
29% - social distancing/sanitisation
35%
17% - customer tracking
30%
Other challenges:
•
29.3%
28.7%
25%
20%
Travel restrictions,
16.6%
15%
•
12.7%
Product availability, 10%
•
Anxiety/stress among staff
•
Trade restrictions.
7.0%
5.7%
5%
0%
Not applicable
Ensuring appropriate distancing and sanitisation was available
Customer / client management / tracking
Other
Communicating Consideration of the external visitor need of a workplace, appropriateness with or co-working space staff
SPECIAL TOPIC: COVID-19| LOOKING AHEAD 3-6 MONTHS How concerned are enterprises on the ongoing impacts of COVID-19 over the next 3-6 months
Over 43% of enterprises
are unsure of the ongoing impacts of COVID-19 on their
50% 45%
43.4%
40% 35% 28.3%
30%
business, with over 28% of enterprises
25% 20% 15%
envisioning an ongoing negative impact.
10.7%
10.1%
10%
7.6%
5% 0% Not sure yet
The ongoing impact will be The ongoing impact will be negative for our enterprise positive for our enterprise
No ongoing impact, not concerned at all
Other
SPECIAL TOPIC: COVID-19| WORKFORCE NUMBERS Anticipated (or already made), changes to workforce numbers as a result of COVID-19
45% - anticipate no change
to current workforce numbers 14.6 - decrease
13.8% - unsure 9% - increase
50% 45.3%
45% 40% 35% 30% 25% 20%
17.6% 13.8%
15%
8.8%
10%
7.6% 3.8%
5%
1.9%
1.3%
Reducing by >50%
Reducing by 2649%
0% No change
N/A
Unsure
Increasing workforce
Reducing by <10%
Reducing by <25%
SPECIAL TOPIC: COVID-19| ‘CATCHING UP’ WITH WORK Are enterprises anticipating/experiencing a rush to 'catch up' with work demands
55% - no rush to ‘catch up’ with work once Alert Levels lowered.
60% 54.7%
38% - Experienced ‘catch up’ 50%
Other: “had to put projects on hold due to cashflow issues with
38.4%
40%
30%
investors”, 20%
“Had a big rush now very slow”,
“Extra work but less staff and
10%
more hours”. 0% No
Yes
* Responses do not equal 100% due to respondents being able to enter comments instead of selected a yes or no option
SPECIAL TOPIC: COVID-19| NEW OPPORTUNITIES Has COVID-19 created new commercial opportunities for enterprises
28% - COVID-19 has
created new commercial
80%
opportunities for them.
70%
67.9%
60%
50%
“New commercial 40%
opportunities are likely … it’s a matter of keeping
aware of the challenges and changes.”
27.7%
30%
20%
10%
4.4%
0% No
Yes
Other
SPECIAL TOPIC: COVID-19| BORDER RESTRICTIONS AND GLOBAL IMPLICATIONS ON BUSINESS Will global border restrictions or global implications have a direct or indirect impact Taranaki enterprises
Results â&#x20AC;&#x201C; quite close 60%
52% - global border
51.6%
restrictions did not
50%
directly or indirectly
40%
impact on their
30%
business.
48% - did impact on
48.4%
20%
10%
their business. 0% No
Yes
SPECIAL TOPIC: COVID-19| PRACTICES AND LEARNINGS TO BE INTRODUCED
• “Options for online digital selling of information will be implemented” • “Look at preparedness of remote work”
• “Better systems for electronic review and sign off”
Tech
• “Less travel. More electronic communications, less direct contact with clients” • “Better internal communication and better management of expenses” • “To be better prepared for future shocks”
Finance
SPECIAL TOPIC: COVID-19| ENDURING CHANGES AND TRENDS
• “Reduced demand for commercial space – increased flexibility for employees” • “More readiness to accept non-traditional work practices, e.g. virtual meetings”
Change in methods of working
• “Fear of travel” • “Financial viability of business” • “Slowing in spending as people are more cautious”
Financial considerations
• “More focus on innovation, R&D, local manufacturing and exporting” • “A more centralised economy” • “More understanding of Taranaki’s work force capabilities and keeping work local”
Support local
SPECIAL TOPIC | TARANAKI EXPERIENCE AND LOOKING AHEAD
COVID-19| TARANAKI EXPERIENCE Since mid-March, almost
Over 70% of enterprises
600 businesses have
surveyed during lockdown
approached Venture
were extremely or very
Taranaki for enterprise
concerned about the impact
support due to COVID-19.
of COVID-19 on their
Approximately 86% of
business, it was no surprise
those businesses were
that over 80% of enterprises
from New Plymouth
had accessed the
district.
Governments Wage and/or
Advice sought by Taranaki Enterprises
Financial 5.7%
Leave subsidy scheme.
6.7%
Business continuity
15.3%
Digital strategy 55.3%
17.0%
Human Resource
Legal
COVID-19| TARANAKI EXPERIENCE Venture Taranaki supported enterprises with two COVID-
Local Fund Funds issued $194,400
Regional Business Partners Programme Funds issued $501,394
19 programmes; a Local Fund and the Regional Business Partners programme (a
national fund). These funds were used by businesses to access a range of professional
services and advice.
Enterprises supported - 486
Enterprises supported - 227
COVID-19| LOOKING AHEAD Venture Taranaki is leading the economic recovery pillar aspect of the regional recovery plan. The tactical economic pillar plan has been created to guide and focus efforts from May 2020 to mid-2023 and integrates Tapuae Roa and Taranaki 2050 Actions, shaped by COVID-19 impacts.
Thank you | www.Taranaki.info for more