Small business confidence soars
A record wave of business activity is set to sweep across the nation in 2014, driven by a swell of optimism from the South Island, according to a quarterly ANZ survey of small firms.
Retailing, agriculture and manufacturing were leading a lift in optimism which had resulted in firms' expectations of their own activity, hiring and profitability for the coming year soar to new highs, the results of the ANZ Business Micro Scope survey of small firms showed.
ANZ managing director of retail and business banking Fred Ohlsson said construction and agriculture were caught in the tailwind of the Canterbury rebuild and increasing commodity prices.
However, optimism was at, or near, historic highs across all major sectors, according to the survey of 250 micro and intermediate firms in New Zealand.
The rising confidence was paving the way for a broad-based uplift in business activity, employment and economic growth, he said.
"These factors have come together to create a sweet spot for the South Island, with optimism in Canterbury spilling over to the rest of the island whose record-high optimism now tops that of Canterbury itself."
Confidence in Canterbury was at a net 27 per cent, compared to 21 per cent the previous quarter.
That confidence was spilling into the rest of the South Island, where small business confidence had grown to 30 per cent from 21 per cent the previous quarter.
Though not quite at the same levels as the South Island, Auckland business confidence also entered the new year at a new high of a net 24 per cent, which boded well for the role of New Zealand's largest city in the upturn, Ohlsson said.
Results from the quarterly small business optimism survey showed confidence was at its highest since comparable data was first collected in 1999.
A net 45 per cent of small Kiwi firms expected to lift business activity during 2014, double the long-term average.
A net 17 per cent planned to take on more staff and 29 per cent expected profits to rise.
The services sector was the most upbeat with confidence at 25 per cent.
But retailing recorded the largest lift in confidence, from 14 per cent to 22 per cent, followed by agriculture and manufacturing.
Agriculture was the top sector for profit expectations for the first time in two years.
Ohlsson said the results mirrored what ANZ was hearing from customers.
Small firms saw the approaching "growth wave" and were gearing up to ride it in a way that positioned them better for future economic cycles.
"For a nation of small businesses, this spells good news for employment and the ongoing strength of our economy."