The outlook among business owners in the Wellington region is positive, as new figures show confidence in their own business situation is on a par with pre-COVID-19 levels.
But business owners also say challenges attracting skilled staff remain, with over a third citing staffing as a concern.
A quarterly business confidence among business owners in Wellington and surrounding cities shows net business confidence grew to a net 41 percent in the March 2021 quarter, the same as in the December 2019 quarter.
Asked to rate how they expect their own business situation to be in 12 months' time, the largest portion of business owners expect things to be 'moderately better'.
Confidence in the New Zealand economy for the year ahead was on the up side at 14 percent, an improvement from a negative 8 percent in November 2020. Similarly, confidence in the regional economy lifted to a net 13 percent, up from 8 percent.
Referring to the improved sentiment as the "first green shoots" since COVID-19, Wellington Chamber of Commerce and Business Central chief executive Simon Arcus said business confidence in the central region "improved significantly" in the last quarter.
"Businesses are the most optimistic they have been in some time...the result had improved considerably from the last survey in December, with all indicators now in positive territory," Arcus said.
Over a third (34 percent) of business owners cited staffing issues as a barrier to business. COVID-19 issues and uncertainty and border closures were also among their top three concerns. Over half (54 percent) of business owners said compared to a year ago, it's harder to find skilled and specialist staff.
If skills and experience aren't readily available in New Zealand, due to closed borders workers with those skills can't be brought in. And many were waiting for skilled migrant visas to be processed.
"Specialist skills shortages combined with immigration processing delays are having a very real wellbeing impact on migrant workers and their employers," Arcus added.
Although improved, the survey showed business sentiment is fragile. Negative changes in the COVID-19 environment, such as potential delays in the COVID-19 vaccine rollout are stumbling blocks that could derail confidence.
"What this shows is that things are beginning to right themselves, but it's clear the confidence is reliant on things continuing to go well," Arcus added.
When asked about their ability to operate at different alert levels, business owners said tighter restrictions have a big impact. Over half (54 percent) expect to operate as usual under alert level 2 restrictions and a third just under capacity. But alert level 3 is the tipping point, with expectations of ability to operate as usual dropping to 17 percent of business owners.
The results indicate central businesses weren't as hard as Auckland businesses in February, when new COVID-19 community cases resulted in Auckland businesses operating under alert level 3 restrictions for ten days while the central region (and the rest of the country), operated at alert level 2.
Arcus said the results also showed businesses need ongoing certainty - and rollout of the COVID-19 vaccine is critical.
"Just under a third of businesses (30.8 percent) have said that it is harder to do business than it was 12 months ago, pre-COVID.
"Being able to continue activities through alert level changes and the hope of a successful vaccine rollout is critical for business confidence to remain buoyant," Arcus added.
The central business confidence survey represents businesses across a range of sectors including manufacturing, professional, retail and agriculture, from sole-traders to 200-plus staff.