Small business confidence in economy rebounds confidence - MYOB

The retail and hospitality sector is one of the most confident about the economy this year.
YURI ARCURS/123RF

The retail and hospitality sector is one of the most confident about the economy this year.

Confidence about the economy is increasing among small and medium businesses according to the latest MYOB survey.

More than 1000 small businesses were surveyed in MYOB's Business Monitor, which showed confidence in the economy was up from negative 30 per cent in September 2015 to positive 5 per cent in March.

Businesses in the logistics, retail and hospitality and trades were particularly confident while the primary sector and Christchurch-based businesses managing the city's rebuild were among the least confident. 

In the year to March 37 per cent of small businesses also reported an increase in revenue, up from 30 per cent in September, and 21 per cent reported a revenue decline, down from the previous 23 per cent.

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The MYOB survey appears to contrast to the Quarterly Survey of Business Opinion released on Tuesday which shows business confidence at its lowest level in five year in the first quarter.

Wellington businesses in the MYOB survey saw a significant improvement with 35 per cent experiencing revenue growth, up from 26 per cent last year.

Nicky Dargie​ of DMG, a Palmerston North company that helps small businesses grow, had more than 100 clients in her database from all industries ranging from childcare to machinery repairs. 

Overall, she had noticed improved confidence among her clients, much of which came off the back of a fairly confident 2015.

There was, however, a bit of caution in the primary industry-dependent region and the overall feeling was one of cautious confidence, she said.

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"In this region at the moment Fonterra is making us just sit back a little so we're waiting to see how that plays out.

"I think for the majority of businesses, if they keep doing what they do best and get the support they need, they'll do okay."

MYOB New Zealand general manager James Scollay said the strong performance of the small business sector meant good things for future economic conditions.

"It's not surprising that we have seen such a turnaround in confidence levels, given how well many of our regions and key industries have performed over the last 12 months.

"Whereas business operators were heading into Christmas last year with a good degree of caution, what they've actually found is a general improvement in their revenue and considerable stability in the local economy."

Small businesses also have a sunny outlook on the future, with 37 per cent predicting improved returns in 2016.

Only the primary sector expected declines to outstrip gains.

The finance and insurance industry was the most confident about revenue growth at 49 per cent forecasting an increase followed by the retail and hospitality sector at 46 per cent.

"That growth is expected to be fairly even across the country, with Auckland businesses forecast to be somewhat ahead of the curve, on 40 per cent," Scollay said.

 - Stuff

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