Labor and material shortages will see Kiwi businesses ‘lost to Australia’, economist says
The results showed that Auckland’s extended lockdown, Wednesday marking the ninth week of Level 4 and Level 3 alert restrictions for the super city, combined with split alert levels for the rest of the country, has a greater impact on commercial activity than previous closures. The 2020 national lockdown lasted for seven weeks, from March 25 to May 13.
The survey, which collects comments from companies operating in 31 categories, shows staff shortages in the areas of accounting, construction, horticulture, hospitality, IT, insurance, recruiting and shipping.
Companies involved in construction have reported raw material price hikes, supply chain issues and compliance delays.
In the commercial sector, “over-committed suppliers and subcontractors” have resulted in “big delays, low productivity and cost overruns”. Another pointed to “massive shortages of materials”, from wood and steel, to simpler items, such as silicone and bacon.
Dairy farming has been reported to be positive and profitable, with record milk prices, although regulation and rapid cost increases were cited as concerns.
With the hospitality and events industry, which one company described as “decimated”, there were concerns about reopening businesses, a lack of confidence and a shift in the consumption of products and services. services.
Businesses involved in residential real estate have reported supply and demand issues, a buyer FOMO, and low listings.
The results of the business survey follow a larger-than-expected 4.9% annual jump in the Consumer Price Index in September – the biggest annual jump in more than a decade.
Businesses are currently facing extreme cost pressures, Alexander said, showing there’s still a lot more inflation to come.
And as companies increase their prices, supply chain issues ultimately affect consumers, as it’s harder to shop elsewhere.
“Normally we would go online and look for an alternative… but the alternative is going to take six months to come to us,” Alexander added.
These price increases will translate into higher wages – and the survey results show plenty of evidence for increased wages.
“The wages offered as increases, people demanding higher wages and salaries… there is a paid response going on there,” Alexander said.
The staff’s current bargaining position is the strongest in New Zealand in more than four decades, Alexander said.
Those who haven’t been able to get a decent pay raise this year, next year, or the year after may be wise to consider changing jobs.
“At 4.9 percent [inflation], if you haven’t seen your salary increase by 4.9%, you are getting poorer. “
Further details, including reviews from companies in each category, can be found in Tony Alexander’s Business Survey, available here.