Survey shows resilience, mid-sized businesses plan for growth despite challenges

MYOB chief executive Paul Robson says New Zealand's mid-sized businesses continue to position themselves strongly.

New Zealand’s mid-sized businesses are holding steady amid ongoing economic challenges, but a new survey commissioned by MYOB has revealed split outlooks for the year ahead.

The survey of more than 500 leaders and decision makers of medium-sized businesses across the country shows that 46% have seen an increase in revenue compared to this time last year, with 30% indicating revenue levels are about the same.

But the remaining 25% of respondents said that their revenue was down, reflecting the pressure on the wider economy.

MYOB chief executive Paul Robson said New Zealand’s mid-sized businesses continue to adapt to challenges quickly.

“As the slower-than-anticipated economic recovery generates mixed performance and sentiment in the market, leaders of New Zealand’s medium-sized businesses are balancing their operations with the challenge of these conditions, the cost of finance and falling consumer confidence,” Robson said.

“That said, there are bright spots coming through that indicate gradual growth will continue, particularly in industries that have been hit the hardest.”

Prospects for the year ahead are more positive, with just over half (51%) expecting revenue growth over the next 12 months. Thirty per cent expect revenue stay the same, while nearly one in five (18%) anticipate a revenue drop.

Robson said almost two-thirds of manufacturers surveyed have more work in the pipeline through to the end of the calendar year, with more than a third of construction and trade businesses (37%) reporting more work lined up.

As for the challenges that could have the greatest potential impact on business over the next year, 44% of respondents pointed to international banking and financial stability as their biggest concern.

Shipping and financial costs were the next biggest concern (43%), followed by cargo or shipping route disruptions (41%), geopolitical tensions (33%) and foreign exchange risk (33%).

“A significant proportion of mid-sized businesses in New Zealand export their goods and services overseas; however, global developments – whether financial downturns or geopolitical tensions – can reverberate across the entire business landscape. The US tariffs are just one example of this.”

“This is leading both small and mid-sized businesses to place greater emphasis on developing local supply chains and expanding domestically.”

Mid-sized businesses are making strategic moves in response to changing global dynamics, with 39% of respondents adjusting contracts or agreements to allow for price variances.

Local business operators are also looking for new supply partners overseas (35%), locking in supply contract costs (35%), seeking out local suppliers (34%) and revisiting contracts with overseas suppliers (31%).

Robson said just under a quarter of mid-tier organisations surveyed by MYOB said they were aiming to grow their presence in the local market as an alternative to exporting.

“As these firms navigate uncertainty at home and abroad, what stands out most is their determination to keep moving forward.”

“With a pragmatic eye on global risks, an openness to local opportunities, and a willingness to embrace new technology, New Zealand’s mid-sized businesses are showing that they have both the resilience and ambition to not just withstand challenges, but to shape their own path to growth.”

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.