Workforce shortages and the cost of compliance of doing business in the South is now "overwhelming", Business South chief executive Mike Collins says.
That comes in the wake of a new quarterly report on business confidence — the organisation has started a new process to seek feedback from business community members and non-members.
While there was some confidence and growth in the business community, there was a strong sentiment around the overwhelming nature of staff shortages and cost/compliance.
The major issues top of mind for businesses were labour market constraints; inflationary pressures, interest rate rises and cost of compliance; supply chain constraints, consumer confidence levels and employment law changes.
Sixty-four percent of businesses believed acquiring and retaining new staff was more difficult than it was 12 months ago while 70% of businesses intended hiring new staff within the next three months.
Mr Collins, who was working with his equivalent in Christchurch to run the survey in parallel to provide a South Island view over time, said the survey results were not surprising.
Some businesses had up to a 40% increase in costs, including salaries and compliance.
Dining out might seem expensive but those in hospitality were having to pass on those costs to the customer "and it’s real", he said.
It was "scary" to see the closures of businesses and those compliance and regulatory costs — which were taking a "massive toll" on small businesses — needed to be examined.
From a national policy-setting perspective, the implications on small businesses needed to be considered when decisions were being made.
There needed to be a partnership approach, involving local and national government, around looking at solutions for issues facing the sector so that business could get back to being a business, he said.
Challenges in the southern economy outlined in the survey included retaining and attracting a workforce to grow productivity, lack of ambition, housing for staff, such as Central Otago, council time for processing of consents for property development, costs of living increases, cost of compliance on businesses and staying up with the latest changes from government, and immigration issues including the complexity and slow turnaround of applications.
About 52% of those surveyed believed the strength of the southern economy would be the same to substantially better in 12 months, while 72% believed their business earnings would be the same to substantially better in 12 months.
About 72% were investing in the next 12 months, specifically in training, their people, plant and equipment and technology.
Mr Collins said it was great to see relocation was an option for people both domestically and internationally. Immigration needed to be made a lot simpler to enable that to happen.
Enterprise Dunedin manager John Christie said the survey data showed 37% of respondents had attracted talent from outside the southern region to fill positions.
More than a-third of those surveyed had people from around the country who were willing to relocate to the South for their new job, Mr Christie said.
"Dunedin and the wider South’s ability to attract and retain talent from across Aotearoa is a testament to the overall appeal of the region."
For those who made the move to Dunedin, the city’s vibrancy, quality of life and the exciting innovation coming out of key sectors were some of the factors that likely influenced people to relocate, he said.
That can be supported by the February employment data from Stats NZ.
Employment growth in Dunedin was 2.7% per annum in February — an extra 1553 jobs over the past year.
The fastest growth remained in public administration and safety, although the return of tourism was evident in sharp growth in accommodation and food services, as well as a contributor to the lift in transport employment.
