The second-biggest concern Kiwi businesses are facing after fuel prices

Energy is now the second-biggest concern for Kiwi businesses amid rising costs in fuel and electricity, new research shows.

More than two-thirds (73%) of businesses said they were concerned about current and future energy costs, according to the ASB Business Survey.

The price of diesel and petrol was the single biggest energy worry (77%) over the next 12 months, followed by the price paid for electricity (70%) and electricity lines and network charges (69%).

Only general economic uncertainty (79%) is a greater concern for businesses.

Weak or uncertain customer demand (72%) was the third biggest concern for businesses.

Of the more than 400 business leaders surveyed, 54% said they were cutting costs to mitigate challenges, while 42% were raising their prices. Meanwhile, 19% were cutting staff.

Jonathan Oram, ASB executive general manager corporate banking, said the findings suggest businesses need to treat energy as a strategic business issue, not simply an operational cost.

“Businesses clearly recognise the growing challenges posed by rising energy costs and potential supply disruptions, driven by declining domestic gas reserves, the Middle Eastern conflict and global political uncertainty, yet many are not taking action,” Oram said.

Oram said taking action on energy resilience today can help businesses reduce costs.

“Technologies like solar power, battery storage and electric vehicles are advancing rapidly.

“Research shows that businesses could reduce their energy costs by up to 20% through greater energy efficiency.”

The survey found more than 40% of businesses surveyed spend at least 40% of their energy costs on buildings and facilities.

ASB has partnered with building performance company Tether to launch Better Buildings, designed to help tenants reduce investment uncertainty and improve the efficiency, sustainability and resilience of their buildings.

“Too often, property owners and occupiers have had to navigate building advice, suppliers and finance separately, making it harder to turn opportunities into action,” Tether founder and chief executive Brandon van Blerk said.

“Better Buildings brings the process together in one place, helping businesses build stronger investment cases, access funding and measure results.”