How senior business leaders are feeling, moves to restore confidence in Auckland’s rail network and why Air New Zealand is cutting back on domestic services.
Mid-market and retail businesses’ confidence is on the rise as new surveys reveal how they are feeling heading into the festive trading period.
MYOB’s latest nationwide poll surveyed more than 500 leaders and decision-makers of businesses with 20-500 fulltime employees and over $5 million in annualrevenue.
The survey found that 79% of those surveyed expected the economy to improve over the next year, the highest proportion in three years.
As for revenue, 63% of respondents reported an increase compared to a year ago.
However, there is more to do, with the remaining 37% of respondents indicating their revenue stabilising (26%) or dropping (11%) over the same period,
MYOB executive general manager Kim Clarke said that operating costs had an impact earlier in the year.
“We saw the mid-market under pressure, with fuel prices, utility costs, and cashflow levels all constraining business performance,” Clarke said.
“While these cost pressures certainly haven’t gone away, it’s clear that sentiment has turned a corner and business leaders are ready to build on the gradual improvements we’re seeing across the economy, backed by some healthy sales pipelines.”
MYOB executive general manager - enterprise and practise Kim Clarke.
The optimism extends to the future, as more than two-thirds (68%) of those polled expected their revenue to increase over the next year.
Less than a quarter of respondents remained more cautious and expected their revenue to stabilise.
Expansion plans are on the cards for more than 56% of those polled, with half hoping to scale up from a local to a national level.
With expansion comes investment, and the majority of respondents (46%) expect to spend between $80,000 to over $100,000 over the year ahead.
Expenses suggested by respondents included new product developments, engineering processes, and scientific research.
“While many in the mid-market will be balancing their optimism with some caution over the coming months, it’s really encouraging to see that there is a healthy level of demand coming through from new customers,” Clarke added.
“This firm forward-focus will see this sector of businesses assert their position as the leading market force we know them to be.”
Retail confidence rising
Retail NZ has also released its quarterly ‘temperature check’ on the sector’s confidence, and the news is positive despite remaining challenges.
It shows that 65% of Retail NZ’s members were confident or very confident that their business would survive the next year, compared to 57% in 2023.
Quarterly sales expectations were vastly higher, with 57% of respondents believing they would meet or exceed their Q4 targets, up from just 32% who expected the same in Q3.
According to Retail NZ, 70% of survey respondents did not meet their targets last quarter. However, this proportion has dropped significantly to 43%.
Retail NZ chief executive Carolyn Young.
Retail NZ chief executive Carolyn Young said that many retailers relied on key sale periods including Black Friday and Christmas promotions.
“Many retailers rely heavily on strong sales during this period to ensure they have a buffer for quieter months,” Young said.
“Optimism is the keyword, yet sales data has still been weak.”
Retailers’ concerns about inflation and the cost of living have declined from 80% in Q2 to 75% in the latest survey, but it still remains their largest issue.
Insurance costs are also an issue, with 53% of retailers acknowledging its impact on their businesses.
One key area of concern that has grown is anxiety over freight costs, up from 40% in the last two quarters to 46%.
Young is confident that positive economic signs such as recent OCR cuts and the annual inflation rate back in the 1-3% band are giving retailers hope for the future.
“We look forward to seeing a turnaround in consumer confidence and a greater willingness to support local retail businesses,” Young said.
“It will be critical to see these changes in the final quarter of the year.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
