Wellington is the capital of confidence for small firms, holding on to record business optimism as other parts of New Zealand come off recent highs.
Owners of small firms in the capital are more positive than in any other region, according to ANZ’s quarterly Business Micro Scope survey of small businesses.
Offering a quarterly indicator which focuses on the prospects of small businesses across New Zealand, findings report that the feel-good factor in Wellington has held for two quarters at levels higher than at any time since comparable data was first collected in 2007.
Nationally, sentiment fell back for a second successive quarter in September but remains well above the historical average.
Despite the general easing in confidence, investment intentions across the small business sector are at the third-highest level since 1999, and double the historic norm.
“Businesses across New Zealand remain upbeat and are seeing positives in the current environment despite challenges such as higher interest rates, weaker commodity prices and a high dollar,” says Fred Ohlsson, ANZ’s Managing Director, Retail & Business Banking.
“Their strong commitment to keep investing means they’re putting their money where their mouth is which will go a long way towards supporting sustained growth in the economy.”
Ohlsson believes this impact shouldn’t be underestimated, as small firms account for 90 per cent of Kiwi businesses and provide nearly one in three jobs.
“Wellington is now leading the way, as its small firms play to their strengths in technology, smart industries and the creative sector,” he adds. “Nationally, manufacturing has also had a welcome boost while the service sector remains the most upbeat.”
Highlights from the Sept 2014 ANZ Business Micro Scope survey of small firms [Net percentages reflect the balance of sentiment – i.e. positive minus negative responses]:
• Confidence among small businesses has remained well above historical norms, with a net +20% feeling positive, though below the record highs recorded in the March quarter
• Investment intentions (down 4 points to +17%) are at the third-highest level since 1999, and double the historic norm
• Wellington (unchanged at +30%) is more positive than at any time since comparable data began in 2007, and is the nation’s most upbeat region – followed by Canterbury (+26%), the rest of the South Island (+27%) and Auckland (+18%)
• Services (down 5 points to +25%) remains the most postive sector. Second-equal are Manufacturing (up 1 point to a nine-month high of +23%) and Construction (down 4 points to +23%)
• Regulation was identified as the biggest challenge facing small businesses (cited by nearly one in five), followed by low turnover and lack of skilled staff