Europe’s Economic Winter Shouldn’t Spoil the Kiwi Summer

2 February 2012

Europe’s Economic Winter Shouldn’t Spoil the Kiwi Summer

• Majority of Kiwi businesses plan for business growth in 2012
• Optimism in 2012 returns to 2010 levels
• Business confidence higher in New Zealand than Australia

Leading business provider MYOB, is cautioning local business owners not to read too much into the negative economic data from Europe, with the New Zealand small business economy expected to remain positive in 2012.

According to the latest data released from the MYOB Business Monitor, a survey of over 1000 businesses nationwide, the majority of New Zealand business owners are planning for growth in 2012 – and outstripping their Australian counterparts in expectations for the year ahead.

MYOB general manager Julian Smith says while it’s clear the global economy will see more turmoil in 2012, and Europe may slip into recession, New Zealand businesses are well positioned to weather any local effects.

“With so much data readily available on world markets and constant analysis of even small changes in the data, we are at risk of talking down our own prospects for the year, creating negative consumer sentiment, and stifling investment and hiring intentions,” says Julian Smith.

“It’s worth remembering that the majority of businesses operate purely in the local market, and are not overly exposed to external factors – except where they translate into costs like fuel prices and credit.”

“Although businesses are sensitive to these costs, in the main, they expect trading conditions to be improved in 2012.”

Two-fifths (41%) of business owners surveyed expected their business revenue to have increased by August 2012 – well ahead of the 33% who reported more work or sales in the pipeline in the final quarter of 2011. This optimism has returned to the level last seen in the MYOB Business Monitor surveys conducted in November 2010 (42%) and August 2010 (43%).

“Business owners in New Zealand are actually more optimistic about 2012 than business owners in Australia,” says Julian Smith.

“Only 32% of business owners surveyed in Australia expected their revenue to have increased in a year’s time – dropping from 48% in April 2010.”

Correspondingly, expectations of revenue losses in 2012 are also fewer in New Zealand (13%) than they are in Australia (20%).

Business owners in Wellington (49%) were the most likely to have optimistic expectations of their revenue, just ahead of business owners in Christchurch who are almost as confident (46%), and who were by far the least pessimistic about losing business revenue during 2012 (6%).

New Zealand business owners are also more optimistic about a return to economic growth within the next 12 months than their Australian counterparts, with 25% expecting conditions to be improved within the year, compared to just 21% in Australia.

Julian Smith says despite growing international gloom, local business owners are also increasingly prepared to invest in their own performance in 2012.

According to the latest MYOB survey, more than half (52%) of all business owners have increasing or growing their customer and revenue levels as their main objective for 2012. At the same time, less than one-third (29%) of businesses are seeking only to maintain their current sales and revenue.

MYOB general manager Julian Smith says this data highlights that Kiwi business owners are ready to break out of the sluggish economic cycle and work to achieve greater levels of growth in 2012.

“To have over half the country’s businesses actively pursuing a growth strategy is a very strong position for the whole economy,” says Julian Smith.

“Kiwi business owners are clearly prepared to back themselves this year, and recognise that a high degree of self-reliance is going to be necessary in order to build a business in 2012.”

“This should have a flow on in terms of both increased investment and more productive capacity – good news for the wider economy.”

“With this kind of positivity from the majority of business owners, we need to be careful not to read too much in to worsening international conditions, and focus to a larger degree on the performance we can control – our own.”

About MYOB
New Zealand’s largest business management software provider, MYOB has over 50 products and services that have helped more than one million businesses in Australasia. Established in 1991, MYOB serves businesses of all ages, types and sizes, delivering solutions that simplify accounting, payroll, client management, websites and much more. With a network of more than 20,000 accountants and other professional partners, MYOB provides the support and tools that help make business life easier. To further this cause, the company is taking its products online. For more information, visit www.myob.co.nz

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