Canterbury businesses will welcome the Reserve Bank’s announcement to cut the OCR by 50 basis points to 4.75%.
Business Canterbury Chief Executive Leeann Watson says, “The drop will provide a further boost to business confidence at a time when businesses continue to face increased financial pressure. We hope the announcement will continue to increase consumer confidence and demand, which have both been at an all-time low.
“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 Business Canterbury’s quarterly survey of over 450 businesses in Canterbury.
“Following the previous OCR announcement in August, we saw quite a significant improvement in expectations for both the Canterbury economy and individual business performance, a big turnaround from what we saw in the results from May.
“This optimism indicates that recent drops in inflation and interest rates are positively influencing the business operating environment, even as many companies continue to navigate the challenges of what has felt like an elastic band economy over the past few years.
“We hope to see further improvement in consumer confidence which saw a lift in September, although still net pessimistic, with spending remaining subdued in many areas. Over the three months to August, retail spending in Canterbury declined by just over 1% from the same time last year, a reduction of about $26 million, which businesses continue to be concerned about. We hope today’s further reduction will see further improvements in consumer confidence to help boost sales for businesses, off the back of an extremely challenging period.
“Today’s announcement is another positive step in encouraging an environment that supports economic activity, enabling businesses to concentrate on productivity, innovation, and growth. Canterbury businesses have shown incredible resilience over the past four to five years, and I’m confident that they will continue to thrive as we move toward a more optimistic economic future.”
