More city businesses feel outlook positive: OCC

Businesses in Dunedin have shown a "significant" positive rise in the belief that their own business outlook is improving - up from 29% to 40%.

However, some constraints remain, and a new trend has emerged with rising concerns over the timeliness of immigration visas and threshold payments for temporary workers, Otago Chamber of Commerce chief executive Dougal McGowan said.

"Dunedin is feeling more positive than the rest of the country that the New Zealand economy is doing OK," he said in an interview.

The chamber's latest survey of business opinion, for the quarter to June, attracted 105 respondents.

Earlier this month, Otago and Wellington were singled out for their respective economies' strengths by Westpac analysis.

Otago was reported to be continuing to perform strongly, underpinned by favourable agricultural conditions for dairy, red meat and the viticulture sector.

While Otago's growth in job vacancies was slowing, it had sharply lower unemployment and household spending should have been benefitting from house prices continuing to pick up.

Mr McGowan said the scrapping of the proposed capital gains tax and other taxes being "put on the back-burner" had assisted the "significant swing" in own-business outlook, from 29% the previous quarter to 40%; while 36% believed their outlook was same; an unchanged result.

"There is a lot more positive business sentiment out there," he said.

A combination of infrastructure work, the pending hospital rebuild and rise in the number of residential and commercial building consents was underpinning much of the southern sentiment, Mr McGowan said.

"We've reversed that trend of expecting a slower winter with the number of projects coming up in Dunedin and around Central Otago,' he said.

However, the skills shortage - from unskilled and skilled through to some professions - still rankles in the South and was raising concern with business. This had been ongoing for almost three years.

Those businesses finding it harder to find the right staff rose from 80% to 90%.

Mr McGowan said the newest trend was rising commentary by respondents on immigration issues, both the timeliness of visa acquisition - especially in places like Queenstown where the snow industry and hospitality sectors were crying out for staff - and the changes to earnings thresholds.

Another recent big change for respondents was that product demand and financing was affecting businesses' ability to expand, he said.

With slackening demand there were fewer orders and no need to hire staff, he said.

"Cash flow and managing the difference between the highs and lows is scaring some people off from expanding and growing," Mr McGowan said.

The quarterly survey attracted 105 respondents, mainly from Dunedin, which represented 12% of the chamber's membership; from businesses with more than 500 staff through to sole traders.

"That's a strong turnout by any membership standard," Mr McGowan said.