Unpredictability and uncertainty within many of Otago's small businesses was hindering economic growth and confidence, Otago Chamber of Commerce chief executive John Christie said yesterday.
Large New Zealand companies were reporting a lift in profitability but that was not translating to the small business sector, particularly in key areas such as retail and tourism.
''We are very slow to be hiring, with hiring intentions not translating into tangible jobs. It is a mixed bag out there, with some small businesses doing well and others struggling.
''The unpredictability is worrying. There is no pattern to production or work flow. It is nearly impossible to pick patterns from previous years to use now.''
Online retailing was having an effect on ''high street retailers'' but some traditional retailers had expanded their business by selling their products to a wider market through the internet, Mr Christie said.
Tourism was also becoming more difficult to predict, as seasonal travellers were often affected by currency changes.
The CPA Australia Asia Pacific Small Business Survey said improved economic confidence, robust economic data, surging property prices and low interest rates had failed to translate into a ''serious upswing'' in New Zealand small business confidence.
''The fact is the New Zealand dollar is strong and on most indicators this strengthening looks set to continue to 2014,'' CPA Australia chief executive Alex Malley said.
''However, despite this positive outlook it appears confidence has not yet translated through to the small business sector. While 57% of small business says they will invest in growth in 2014, this is down on last year's figure. Fewer small business plans to put on more staff in the year ahead.''
Mr Christie said the CPA survey backed up comments from the chamber's focus groups. Changes of confidence had large impacts on the local economy. If people felt less certain about things like jobs and their own futures, they spent less. That lowered business confidence, which in turn lowered consumer confidence.
''Our market is fragile. The litmus test for small business is being able to take on staff. Unfortunately, we are still seeing too many retrenchments and staff lay-offs. Those leaving by natural attrition are not always replaced.
''Things are turning in some sectors with hiring but it is not a universal theme,'' he said.
The CPA survey found New Zealand small businesses were the third most confident of the markets surveyed in their local economy in 2014 behind Indonesia and Australia. The positive response might be due to recent robust economic data and the rebuilding of Christchurch after the 2011 earthquake.
Of the New Zealand respondents to the survey, 53% thought the economy would grow in 2014, up from 46% in 2013 and 48% in 2012.
''Despite the increase in confidence in the New Zealand economy, the survey is yet to show any comparable increase in the growth prospects of New Zealand small business,'' Mr Malley said.
In fact, the percentage of New Zealand small businesses expecting to grow in 2014 was 57%, down from 64% in 2013. The percentage of businesses expecting to decline or shut down next year was 13%, up from 10% last year.
