Tony Alexander survey finds election uncertainty now businesses' top concern
New Zealand businesses are finding it increasingly difficult to plan ahead, with political uncertainty ahead of this year's general election now the single biggest concern cited in independent economist Tony Alexander's latest Mint Business Insights survey.
Labour shortages emerge despite high unemployment
In a result Alexander (pictured) flagged as notable, a net 17% of businesses reported increased difficulty sourcing staff this month, up from 13% in July and the strongest such reading since the survey began. This comes despite the unemployment rate sitting at 5.6%.
"Mixed signals have come through regarding labour availability – but this in itself is interesting in the context of a 5.6% unemployment rate. Once sustained economic growth returns labour availability may quickly become a problem for many businesses," Alexander said.
Politics overtakes the economy as top worry
The August survey, which drew responses from 276 businesses across more than 30 sectors, found concerns about politics have climbed to the top of the list, ahead of the general economic outlook and customer demand. Alexander noted the shift may be linked to recent political opinion poll movements.
"Uncertainty about the true strength in the local and global economies, and with this year's general election outcome and resulting policy framework increasingly unclear, businesses are finding it difficult to undertake their planning," Alexander said.
Worries about the state of politics have now reached a record level in the survey's history, which began in March 2023, while concerns about the broader economy have eased for four consecutive months.
The election itself is confirmed for Saturday 7 November, giving businesses roughly two and a half months of continued unpredictability before the outcome is known.
The RBNZ lifted the OCR to 2.5% in July, its first hike in three years, with further tightening flagged ahead of the September Monetary Policy Statement. Alexander noted that interest rate concerns have eased for three straight months, though this could shift once that September review lands, adding a further complication for businesses already navigating the election.
Spending intentions hold steady on technology, pull back on climate
Despite the uncertainty, businesses continue to prioritise investment in technology and digitisation, followed by strategy development and social media presence. Plans to lift spending on new equipment also improved slightly this month.
Conversely, spending intentions around climate change mitigation and inventory levels remain firmly negative, a trend that has persisted since early 2024.
Looking further ahead, a net 49% of businesses expect their revenue to be higher in 12 months' time, broadly unchanged from July, while a net 14% expect staff morale and mental health to improve over the coming year.
Just a net 1% of businesses plan to raise prices in the year ahead, an improvement on last month's net 6% decline, though Alexander cautioned this is too early to read as a shift back toward an upward pricing trend.
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