New Zealand’s small and medium businesses are now showing the highest growth in more than half a decade, capping a remarkable turnaround in the last five years, according to the Five Year MYOB Business Monitor Report.
The biannual national survey of over 1000 small and medium sized business operators over the five years from July 2009, illustrates how far businesses have come since the Global Financial Crisis (GFC).
In the latest Business Monitor survey, released in September, almost twice as many businesses report revenue growth as losses – more than reversing the trend seen in mid-2009.
MYOB CEO Tim Reed says local SME operators have drawn a line under the post-recession period, especially in the last two years.
“New Zealand’s SME sector has been on a steady climb back to growth since 2009,” says Reed. “Thanks to the hard work of businesses across the country, that growth is now stable and widespread – with few businesses now experiencing losses or expecting them in the coming year.”
Reed says despite the country performing well in the post GFC period, Australia’s small business sector has not enjoyed the same level of performance as New Zealand companies.
“New Zealand’s SMEs have really shown how it’s done, in terms of building growth and making the most of their resources in often challenging circumstances,” says Reed.Read more: 360-degree leadership: John Emerson of Tait Communications
“In contrast, growth in the SME sector in Australia has remained relatively static, with the number of businesses reporting growth peaking at just over a quarter in 2010/2011, before falling to its current level of just 21 per cent.”
It’s hard not to see a connection between the adoption of internet services and products and at least some of the growth New Zealand businesses have enjoyed over the last five years.
The proportion of small businesses in Australia reporting falling revenue reached 41 per cent in May 2012, before reducing to 31 per cent in the latest Business Monitor, the lowest level in five years.
Much of the recovery in the SME sector has come without significant growth in either wages or employment, as investment intentions in both areas have remained static over the last five years.
“In fact, slightly fewer businesses are intending to hire more full time or part time employees in the next year than were in 2009,” says Reed.
“The number of businesses overall that are employing has steadily decreased over the last five years. However, with low unemployment and stable growth, it is likely that we will see an increase in both wage rates and new hiring intentions for the SME sector in the near future.”Read more: Expect more ‘mega partnerships’ among technology vendors
The MYOB report notes the critical role played by technology in the growth in the SME sector.
In particular, the proportion of businesses with an online presence – either a website, social media site, or both – has grown from 27 per cent in 2010 to 43 per cent in 2014.
The growth of social media for business has been particularly marked, with 25 per cent of local businesses now operating a social media site and 42 per cent using the platform for business. Over half of all local businesses (52 per cent) now accept online payments and 39 per cent use tablets in the workplace.
“It’s hard not to see a connection between the adoption of internet services and products and at least some of the growth New Zealand businesses have enjoyed over the last five years,” says Reed. “We know from the survey that businesses with an online presence not only enjoy better customer relationships and convert more inquiries, they are typically up to 30 per cent more likely to earn more.”
“New Zealanders love technology, and it is great to see over the last five years, more and more business owners have begun exploring the opportunities that a whole raft of technology tools can bring to their business.”
Send news tips and comments to firstname.lastname@example.org
Follow Divina Paredes on Twitter: @divinap
Follow CIO New Zealand on Twitter:@cio_nzRead more: MYOB app allows users to manage their accounts and cash flow from their smartphones