Latest 2degrees study conducted by Perceptive, reveals the key issues facing NZ business decision makers, and how thriving companies are weathering the storm.
Good news – businesses say they are seeing ‘green shoots’ and are optimistic about the year ahead.
2degrees surveyed 700 business decision makers nationwide as part of it’s Shaping Business Study, now in its fourth year, and found business is shifting focus completely away from the pandemic and towards managing rising costs and improving productivity.
Andrew Fairgray, Chief Business Officer at 2degrees, says this year’s report doesn’t feature any regional trends. “Interestingly, businesses across the regions are reporting the same things – which is a marked change from previous years where business sentiment varied by region.”
Bay of Plenty businesses, and their counterparts nationwide, said:
- Business optimism continues to trend slightly upward despite the recessionary pressure.
- Cost and pricing continues to be front of mind for business leaders.
- Larger businesses continue to thrive while smaller businesses are more likely to be struggling.
- Staff and productive use of technology are the make or break for businesses in 2023.
The report, revealed that 87% of businesses have seen their running costs increase in the past twelve months, yet only 63% had increased their prices over the same time, suggesting that many businesses are having to absorb inflationary impacts.
Fairgray says the report shows that while the pandemic may be in the rearview, the business outlook is still filled with challenges.
“This is the second straight year that we’re seeing cost increases across the board for businesses, but the impacts of that aren’t being felt equally.
“What we see in the market and in this report is that the businesses who can thrive in this environment are those who can find innovative ways to increase productivity, whether that’s through attracting and retaining great staff or making more effective use of digital tools.”
As the economy gets to grips with a new set of challenges, businesses are moving from just getting by to a more measured outlook. This year, the number of business leaders who said they were surviving (just getting by) dropped by 6 percentage points to 23%, while most businesses (53%) said they were reviving (getting things back on track), and 17% said they were thriving (stronger than we have ever been), up from 14% last year.
Other measures of optimism and outlook have stayed consistent from last year, as business leaders acclimatise to the new normal. 41% of business leaders said they were feeling about as optimistic as they were last year, with nearly a third (32%) feeling more optimistic than in 2022. Half of businesses anticipated that their revenue would grow in the next year, a steady result from the 2022 study.
The study shows that effective use of technology is one of the best predictors of business success. Businesses use of digital technology to improve productivity aligned directly with their reported performance with 76% of thriving businesses saying digital technology improves their productivity, compared to only half (50%) of surviving businesses saying the same.
Fairgray says the report paints a picture for businesses looking to get ahead.
“In this inflationary environment, the best way for businesses to move the dial is to increase their productivity and deliver more value with the resources they have.
“Attracting and holding onto the best staff will be top of the list for most businesses, and making sure that modern technology tools are reducing friction and adding value shouldn’t be far behind.
“The combination of these two factors will be how businesses can set themselves apart and thrive long term.”
Read more: 2degrees.nz/business/shaping-business-study
