Canterbury businesses will be breathing a small sigh of relief as interest rates start to fall, following today’s OCR announcement by the Reserve Bank.

Business Canterbury Chief Executive, Leeann Watson says: “Since February 2023 when inflation and interest rates outpaced labour market constraints, cost pressures have consistently taken the number one spot in business concerns, according to our quarterly survey of over 400 businesses in Canterbury. In May, 38 per cent of businesses surveyed were facing significant impacts from rising costs, primarily driven by interest rates and inflation, alongside wage costs.

“This interest rate drop not only provides immediate relief but also signals that inflation is really starting to fall. We anticipate this will be reflected in some guarded optimism and potentially improved business confidence as we open our next quarterly survey for responses later this week.”

Despite a small step toward cost stability today, Business Canterbury is aware that challenges remain. “Many businesses are currently worse off than they were 12 months ago and are looking at generally weaker performance over the next year too. There is still a steep hill to climb, however there is now light at the end of the tunnel, and for that alone we should take some comfort today.

“Canterbury businesses have shown and will continue to show remarkable resilience as we navigate what has felt like an elastic band economy over the last four to five years, and looking ahead into next year as we hopefully enter a period of economic recovery.”

Canterbury businesses are encouraged to participate in Business Canterbury’s upcoming quarterly survey to help measure changes in business confidence and economic activity following the announcement today.