By GEORGINA BOND
A snapshot of small businesses shows the sector is continuing to grow strongly.
A Ministry of Economic Development report released this week shows the number of small to medium enterprises (SMEs) rose 5 per cent during 2002/2003.
The report, SMEs in New Zealand: Structure and Dynamics 2004, looks at the
role small businesses play in the economy, their financial performance and characteristics and their significance compared with those in other countries.
Defining SMEs as those with the equivalent of 19 or fewer full-time employees, it shows that 96.8 per cent of firms fit in this category, with 86 per cent employing five full-time equivalent staff or fewer.
The director of SMEs at the Ministry of Economic Development, Roger Wigglesworth, said local SMEs were in good heart.
"They're creating jobs and wealth and in many areas, such as profitability per employee and job creation, are outperforming their larger counterparts."
SMEs employ 42 per cent of the labour force. The number of full-time workers rose 4.7 per cent between 2002 and 2003.
The average enterprise size was relatively unchanged during the period, at 5.2 full-time employees.
SMEs accounted for 38 per cent ($25,959 million) of the economy's output in 2002, using value-added as a measure of output.
Last year's 5 per cent growth in SME numbers followed an increase of 2.7 per cent between 2001 and 2002.
The majority of SMEs provide property and business services, at 33.9 per cent.
A further 12.4 per cent are in the construction industry and 11.5 per cent in the retail trade industry.
Most SMES are in the major centres. The highest number is in Auckland (105,188) followed by Canterbury (34,443) and Wellington (34,162).
The 1998 industries with the highest survival rates into 2003 were electricity, gas and water supply; and finance and insurance.
The lowest survival rates were in accommodation, cafes and restaurants, and communication services.
