Canterbury businesses are entering 2025 with a renewed sense of optimism, as highlighted by the latest quarterly survey conducted by Business Canterbury.
“We’re continuing to see improvement in business confidence, particularly around financial performance expectations,” Business Canterbury chief executive Leeann Watson said.
Based on the survey, 57% of businesses reported expectations for stronger financial performance in the coming months, which is the highest level recorded since mid-2022.
“This is a great way to head into the New Year after what has been a particularly challenging year for business,” Watson noted.
Confidence in the Canterbury economy has surged to an all-time high of 65%, nearly doubling from the previous quarter’s figures, which had already shown recovery from a downturn experienced in May.
“The easing of inflationary pressures and stabilising interest rates have alleviated some of the key concerns for the business community.”
“We are seeing a gradual improvement in consumer confidence, which is critical for businesses as they plan and act on growth strategies for the coming year.”
The survey also indicates a notable rise in confidence among businesses regarding their ability to handle disruptions, with a net positivity of 57%, a significant jump from just 20% in May.
Although the overall outlook is encouraging, certain challenges persist. Concerns about cash flow are diminishing at a slower pace than desired, underscoring that many businesses continue to operate in a cash-constrained environment. As a result, numerous enterprises are faced with difficult decisions as they approach the Christmas season and enter the new year.
The survey also highlighted the top concerns for employers in December, which are (1) consumer confidence and demand, (2) inflationary pressure and interest rates, (3) productivity and growth, (4) compliance costs, and (5) cash flow and accounts payable/receivable.
Despite a remarkable turnaround in business confidence, strong expectations for future investments could less likely be expected. Intentions regarding hiring and investments in property, plants, and equipment remain inconsistent and have not reached the levels seen a year ago.
Nevertheless, the overall trend is moving in a positive direction.
“As we move into 2025, it’s clear that Canterbury businesses are ready to embrace growth and innovation, and Business Canterbury remains committed to supporting its members through this period of economic recovery,” Watson said.