New Zealand small business confidence is below the Asia-Pacific average but is not falling off a cliff, a survey by CPA Australia shows.
The 10th annual CPA Australia Asia-Pacific Small Business Survey for 2018 showed that 57.4 per cent of New Zealand businesses grew in the calendar year, versus a survey average of 66.3 per cent, while 63.2 per cent of businesses expect to grow in the next 12 months versus the survey average of 68.8 per cent.
On the local economy, businesses were not so upbeat with 46.5 per cent expecting it to grow in the next 12 months versus a survey average of 58.4 per cent. According to CPA, sentiment has improved since the 2017 survey when only 39.9 expected New Zealand's economy to grow but is well below the 61.5 per cent that predicted growth in the 2016 survey.
Across the Asia-Pacific 3,607 small businesses completed the survey including 310 from New Zealand. The survey took place Nov. 16 to Dec. 11.
New Zealand small business conditions remained "generally positive in 2018," CPA said. The number of small businesses that expect to grow also looks positive but "small business confidence in the local economy remains low, with less than half forecasting the economy to grow," it said.
Business confidence in New Zealand has taken a beating since the current Labour-led coalition took office in 2017. According to the CPA survey, small businesses are slightly more upbeat than business confidence in general.
The latest ANZ Business Outlook survey showed the headline confidence index shed a further 7 points in March and now a net 38 per cent of respondents are pessimistic about general business conditions in the next 12 months.
Tomorrow's New Zealand Institute of Economic Research's latest quarterly survey of business opinion will provide a further steer.
According to CPA, a greater number of New Zealand small businesses would experience growth if they increased their focus on innovation, technology, social media and exporting. "New Zealand's small businesses clearly lag behind their competitors from Asia in the application of technology in their business," it said.
A total of 38.1 per cent of New Zealand firms said they do not use social media for business purposes, compared with 3.7 per cent from Mainland China and 18.3 per cent across the Asia-Pacific. Of those local firms surveyed, 50.6 per cent said they do not earn any revenue from online sales, versus 5.4 per cent from Mainland China, and 28.5 per cent regionwide.
"A possible explanation for this relatively low utilisation of technology is the lack of return many of New Zealand's small businesses are receiving on their investment in technology. Only 25.8 per cent said their investment in technology had been profitable, compared with the survey average of 48 per cent.
"Policymakers and others seeking to promote growth in New Zealand's small business sector should consider a stronger focus on increasing the digital capability of small business owners," it said.