Business confidence has dropped to an all-time low, with company executives expressing pessimism about future prospects.
In its six-monthly survey, accounting firm BDO reports that 48% of business leaders felt optimistic about their performance over the past two weeks, down from 57% in the May report.
Only 35% of business leaders felt optimistic about their current financial situation.
The survey, started in June 2022, included feedback from over 530 business leaders and owners.
“We had an uptick before the election in October 2023, and they’ve really been dropping down,” BDO advisory partner Kimberley Symon said.
Symon said that consistently weak performances have influenced the mood of business leaders.
“The longer businesses go not performing well, cash flow becomes more of an issue, and, of course, that filters through the economy into market demand and consumer demand, which of course then has an impact on business performance as well.”
Business leaders in the tourism sector experienced the sharpest drop in optimism, followed by retail, while construction sentiment stayed depressed. BDO said business sectors continue to be impacted by the high cost of living and inflation, which are dampening consumer demand.
The survey has also revealed that agribusiness leaders exhibited the most positive sentiment, driven by improved conditions in the dairy, sheep and beef, and kiwifruit industries.
The overall outlook also appeared muted.
56% of business leaders anticipated feeling positive about their performance in six months, which is a decrease of 10 percentage points compared to earlier this year.
Business leaders do not expect improvement over the next six months.
“What I would say is the survey was carried out before the latest round of OCR cuts, and there are indicators there will be further cuts, so it will be good to see those start to filter through.”