Green shoots noted in small firms

One in five small businesses is reporting good things in the recession, but the Government has disappointed many, a business confidence survey shows.

The Research New Zealand business confidence report for July showed a strong presence of positive sentiment, with half of those surveyed predicting better conditions within six months and three-quarters within a year.

Research New Zealand director Emanuel Kalafatelis said the news supported the general shift toward positivity in business.

"The thing about it was that it will be sooner rather than later. The light at the end of the tunnel is in people's faces at the moment rather than something they are grasping at 12 months out."

Twenty per cent of businesses were thriving in the recession, actually claiming they were experiencing improved conditions, investing and boosting staff numbers.

Mr Kalafatelis said further analysis pointed to the fact these were mainly firms in the service sector, while harder-hit companies were in primary and manufacturing sectors. Service industries were clearly more nimble and could adapt faster than the more equipment-based industries, he said.

Nonetheless, the sentiment created a solid positive base. "Despite the gloom, that's one in five saying they have actually benefited."

The statistics showed that businesses in strife had swung into action and made changes to cope with the downturn, and Mr Kalafatelis said it was encouraging to see that the changes, while predictable, were widespread. "I hope that means we will have a fairly good survival rate."

The Government's response came off badly in the survey. Nearly half of businesses were content with the Government action, but 33 per cent were unhappy with how the public sector had reacted.

"One in three is not an insignificant proportion," Mr Kalafatelis said.

The Jobs Summit was hardest hit with only one in every 100 businesses signalling they had faith that the initiative would have a big impact for small business. Nearly 50 per cent were convinced it would have zero impact.

Firms had suggested improvements, many of which had already been attempted by the Government.

WISH LIST:
Recession busting tips to the Government from small businesses:
Pressure banks to reduce interest rates
Give struggling businesses a tax holiday
Peg the exchange rate at US55c
Include small business in the nine-day fortnight
Subsidise training and apprenticeships
Source: Research NZ survey

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