SMEs feeling happier about prospects

MYOB (NZ) general manager Julian Smith.

Most small and medium size businesses are feeling happier about their prospects for the coming year but more than a third are grumpy about lack of Government help, according to a survey of more than 1000 firms.

The survey shows business is more settled and steadily improving, with 29 per cent of firms gaining more work or sales than six months ago and 40 per cent with about the same amount.

Colmar Brunton did the survey for business software firm MYOB last month.

MYOB New Zealand general manager Julian Smith said the recovery was brittle. "There is still some fragility in the recovery, with 26 per cent of businesses reporting less work or sales than normal."

This was especially the case in country areas, where only 16 per cent of business owners have more work coming in than usual.

The survey also showed that increasing levels of work or sales is unevenly spread in the economy, with 50 per cent of medium-sized business owners reporting that they have more work or sales in the pipeline than expected, compared to only 27 per cent of sole traders.

Business owners in the wholesale and manufacturing industry are seeing the strongest improvements, with 45 per cent reporting higher than normal levels of work or sales, followed by the retail and hospitality industry with 42 per cent.

However, in agriculture, forestry and fishing just 12 per cent report more than normal work or sales in the pipeline.

Just on 55 per cent of businesses now expect the economy to recover in the next year, compared to 43 per cent in the July 2009 survey.

"Unfortunately more work and greater optimism is not yet being reflected in the bottom line of most Kiwi businesses - though they are expecting to see more improvement in this area over the next year, which is a great sign," said Smith.

While 36 per cent of business owners surveyed indicate that their revenue has not changed in the last year, the same percentage reports a decline, and only 22 per cent report an increase in business revenue over the last 12 months.

Business owners in the main centres are more optimistic about their increasing revenue than others, with 50 per cent in Auckland and 46 per cent in Wellington expecting revenue to increase over the next year, compared with 39 per cent in the rest of the country.

Small enterprises in particular are unhappy about the Government's performance over the past year, with changes to ACC, resource management legislation and exchange rate initiatives seen as the most "unhelpful" changes and initiatives.

The survey was done before the final shape of the emissions trading scheme became known, but small businesses with one to four employees felt most strongly about it.

Eighteen per cent said the ETS was very unhelpful, another 9 per cent said it was quite unhelpful with just 5 per cent saying it was very helpful.

Overall about a fifth of New Zealand business owners think the Government is doing a satisfactory job, but there was a strong level of dissatisfaction across the country.

There was some good news for the Government.

Nearly a third of business owners recognise Government support has improved since last year, with 27 per cent describing Government support as better over the past year, compared to 20 per cent who see it as worse.