10 September 2014
SMES SEEING THE HIGHEST GROWTH LEVELS IN FIVE YEARS
Growth now spreading to the regions
The performance of local SMEs has steadily improved over the last 12 months, with local businesses across the country
reporting the highest levels of revenue growth recorded in the last five years.
Thirty-nine per cent of SMEs saw revenue increase in the last 12 months according to the September MYOB Business Monitor
survey of over 1,000 business owners and operators from around the country, conducted by Colmar Brunton. The proportion
of SMEs reporting revenue growth has risen from 35% in March and 30% in September 2013. Fewer businesses also saw
revenue fall: 19%, down from 21% in March.
MYOB CEO Tim Reed says it is heartening to see New Zealand’s SME sector in such good shape.
“What’s particularly positive is that growth is no longer confined to just the two largest centres, with the rebuild in
Christchurch and the expansion of Auckland no more the only drivers of the economy,” says Mr Reed.
“This latest MYOB Business Monitor paints a picture of a whole country enjoying solid levels of economic growth.”
Positive news for the regions
Although Christchurch SMEs continue to report the highest growth levels, with over half (51%) of the SMEs in the city
seeing revenue improve in the last 12 months, the Monitor has also highlighted strong revenues in the regions.
In the March report, a number of North Island areas, including Bay of Plenty (21%), Manawatu/Wanganui (24%) and
Northland (27%), were well below the national revenue growth average of 35%. The latest Business Monitor shows the
regions much closer to the national average of 39% revenue growth, with just Wellington experiencing reporting subdued
revenue.
Centre/RegionYear to August 14 - revenue upYear to August 14 -revenue downNorthland38%18%Auckland38%24%Waikato44%10%Bay of Plenty45%18%Hawkes Bay37%12%Manawatu/Wanganui35%22%Wellington28%27%Christchurch51%11%Otago/Southland37%18%
Strong turn-around in key sectors
The past six months has also seen a significant turnaround in key sectors of the SME economy. The retail and hospitality
sector, which in March 2014 reported revenue falls (33%) outweighing gains (30%), has experienced a major improvement.
In the latest survey, 43% of retail and hospitality SME operators have seen revenue increase in the 12 months to August
2014, while just 23% report a fall.
The primary sector has also recorded an improved performance, with 41% of operators in the agriculture, forestry and
fishing industry seeing a revenue rise in the past 12 months, up from 29% in March. The industry also has the lowest
numbers reporting falling revenue over the period – just 13%.
The logistics sector has experienced the largest fall off in growth over the past 6 months, with 24% reporting an annual
revenue increase, down from 36% in March. However, the industry is experiencing a high level of stability, with nearly
half (49%) reporting steady revenue in the year to August 2014.
Fuel prices still concerning businesses
The main concern of SMEs over the next 12 months is the rising cost of fuel, with over a quarter expecting pain at the
pump – including 52% of transport industry businesses and 36% in the primary industries.
Pressures on SMEs in next 12 months
1. Fuel prices - 26%
2. Interest rates - 21%
3. Cash flow - 19%
Steady growth ahead for 2015
Looking ahead to 2015, SME operators are expecting similar levels of growth to those they experienced this year, with
38% forecasting revenue to increase in the next 12 months, and 43% expecting steady revenue levels. Just 11% expect to
see revenue fall in the next year.
Several of the regional economies that reported strong growth this year, should see that trend continue, as SMEs
forecast high revenue levels for 2015. Northland and Manawatu/Wanganui in particular – regions that have often struggled
somewhat through the five years of the Business Monitor survey – are expected the strongest levels of growth in 2015.
RegionYear to August 15 - revenue upYear to August 15 -revenue downNorthland45%4%Auckland43%12%Waikato39%17%Bay of Plenty37%16%Hawkes Bay31%20%Manawatu/Wanganui45%10%Wellington33%13%Canterbury43%5%Otago/Southland22%10%
Jobs and wages also up in 2015
The positive performance of SMEs will translate into jobs in 2015, with 10% of the operators surveyed planning to
increase the number of full time staff they employ in the next year, and 13% planning to increase the number of part
time positions. It will also support wage growth across New Zealand, with 20% of SME operators planning to increase
wages and salaries in the coming 12 months.
“New Zealand’s SMEs have earned the rewards they are currently enjoying,” says Tim Reed. “Achieving this current level
of growth has been hard fought, and hard won and we congratulate them on their success.”
“Over the coming months, many business operators will be looking to consolidate gains, and invest more in their people,
their systems and their operation, so they can enjoy these benefits for some time to come – no matter what the global
economy may do over the years ahead.”
“A key part of that will be their investment in technology to make their business more streamlined and efficient, and
getting the expert advice they need to maximise the benefits of this period of sustained growth.”
For MYOB product information, research results, business tips, discussions, client service and more visit the MYOB website, or its blog, LinkedIn, Twitter, Facebook, Instagram and YouTube sites.
About MYOB
Established in 1991, MYOB is New Zealand’s leading accounting software provider. It makes life easier for approx. 1.2
million businesses across New Zealand and Australia, by simplifying accounting, payroll, tax, practice management, CRM,
websites, job costing, inventory, mobile payments and more. MYOB also provides ongoing support via many client service
channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing
innovation, particularly in cloud computing solutions, and now spends NZ$35+ million annually on research and
development. For more information, visit myob.co.nz.
About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from
sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to
independent market research firm Colmar Brunton. This most recent survey ran in July/August 2014. The Monitor researches
business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the
government. The weighting of respondents by both geographical location and sector is based on overall market proportions
as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients
and non-clients.
ENDS