Small businesses are more confident about their economic future, but they're finding it harder to grow as sourcing skilled talent becomes more difficult, the latest ANZ quarterly Business Micro Scope survey has found.
“With summer around the corner, the confidence of small firms has bloomed. Intermediate-sized businesses have strong hiring and investment intentions, profit expectations, and a net 42% of this group expect business activity to lift,” said Andrew Webster, ANZ general manager Retail and Business Banking.
The survey, which grouped businesses with up to five employees into the 'micro' segment and those with 6-20 employees in the 'intermediate' segment, used what it calls an ANZ composite measure to demonstrate growth.
The composite measure takes into account respondents' activity outlook, hiring, investment and profit expectations, and found that the overall measure jumped 15 percentage points during the last quarter.
The survey found that 17% of respondents are confident about the business environment in the next year - an increase of 8% since June. Of these, the 'intermediate' segment was most optimistic, at 26%.
“Micro sized businesses are less euphoric, but are still heading into the warmer months feeling more positive about levels of business activity, investment and profits," Webster says.
Repondents also stated that hiring new staff will be important, as hiring intentions lifted 4 points to +14%, the highest in more than a year.
However, the survey also found that while the labour market is 'healthy', the talent pool is growing smaller.
In the regions, Wellington looked most promising as the composite measure increased from +19% to +28% since June. Auckland hit +18% points and Canterbury by +10% points. However, the majority of North Island businesses saw a drop in their composite measure scores.
“While buoyant sentiment is a good signal for economic growth, concern about finding skilled staff continues to dampen an otherwise sunny forecast. This obstacle is particularly significant for small firms whose hiring intentions are at their highest in over a year," Webster explains.
In the sectors, services scored +25%, while construction followed closely behind with +23% and manufacturing scored +19%. Retail dropped by 3 points to +7% and dairy scored -10%.
“Prospects for four of the five sectors improved in September with construction and services leading the way," Webster says.