New Zealand's medium-sized companies have become more profitable, financier GE Capital says in its latest Mid-Market Report.

Defined as businesses with turnover of $2 million to $50m, the country's 21,000 mid-market companies are estimated to contribute about $60 billion and 417,100 jobs to the New Zealand economy.

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See the mid-market insights and trends here

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Within the sector the average profit margin was 7.8 per cent in 2011, up from 6.8 per cent in 2010.

The number of mid-market companies also grew by 520 or 2.5 per cent in 2011, compared with an overall reduction in the number of New Zealand businesses of 2240 or 0.5 per cent.

While the mid-market makes up only 4.8 per cent of all New Zealand enterprises, it contributes just under a third of total economic value and fulltime employment, GE said.

"If the mid-market succeeds, New Zealand succeeds," Greg White, GE Capital chief operating officer, said. "This sector is vital to New Zealand's future growth and it continues to be the cornerstone of the economy, contributing ... one in three fulltime equivalent jobs.

However, succession planning remains a significant concern for the mid-market, with few firms having formal plans in place and many relying on a single person's vision, he said.

Most of the increase in the number of medium-sized firms was in the agriculture, forestry and fishing industries, GE said. The number of small firms in these industries fell, which may indicate firms growing in size or merging. 

- © Fairfax NZ News