Kiwi businesses are struggling with increasing energy costs, and many are hesitant to voice their concerns due to fears of commercial backlash from major energy suppliers, a new survey has found.
The survey was conducted by the Auckland Business Chamber in collaboration with the policy and advocacy group Northern Infrastructure Forum (NIF). Most responses came from SMEs located in the Upper North Island, with the manufacturing sector being the most prominently represented.
Auckland Business Chamber chief executive Simon Bridges said the survey results highlight energy costs as one of the foremost concerns for businesses operating in a challenging environment.
“Nearly 90% of respondents say that energy costs have increased in the past year, and just under 50% describe those costs as highly concerning,” Bridges stated.
“When energy costs combine with the pressure from weak market demand, inflation and increased compliance costs, the result is that many businesses are struggling to keep their doors open.”
Bridges also noted that an unexpected and concerning finding from the survey was the hesitation among businesses to be identified when discussing their difficulties with energy costs, due to fears of commercial consequences.
“Many of the businesses we spoke to – especially those dependent on gas supply – were really uneasy about speaking publicly, for fear that it could jeopardise their ability to secure future energy contracts with the gentailers, who control close to 85% of the retail market.”
“Whether this fear reflects an actual or perceived risk, it points to serious issues with the way market power is being exercised and is really worrying.”
For Barney Irvine, executive director of NIF, the survey results highlight how energy costs are hindering New Zealand’s growth and the people’s livelihoods.
“52% of businesses surveyed say they have increased the prices they charge to customers; a quarter say they cut back production; the same proportion say they have laid off staff; and just under 20% have cancelled or deferred investment.”
Irvine also emphasised how businesses are seeking leadership from the government, with over three-quarters of survey participants believing that tackling energy costs should be a high or very high priority.
Both the Auckland Business Chamber and Northern Infrastructure Forum are advocating for the inclusion of the ten-point Energy Action Plan they introduced in February this year—aimed at enhancing sector stewardship, boosting resilience, and expanding generation and competition—into government policy.