This is the year for small businesses in New Zealand, according to ANZ’s quarterly Business Micro Scope survey. With optimism high, small firms can expect to do more business, lift investment and hire more staff in 2016.
Most significantly, business confidence across New Zealand’s small firms rose to +14% in December, reversing a dip to -23% in the previous quarter, the survey shows.
The composite measure (taking in own activity, employment, investment and profit expectations) lifted 9 points to +16%.
Fred Ohlsson, ANZ managing director retail and business banking, says, “Small firms finished last year strongly and are telling us they see a prosperous year ahead in 2016.”
When it comes to regions, the South Island outside Canterbury (up 22 points to +27%) is most optimistic, with Wellington (up 13 to +26%) the most upbeat out of the main centres. Auckland and Canterbury recorded modest gains, ANZ says.
Sentiment rose across all sectors, led by services (up 11 points to +24%). Construction had the biggest turnaround (up 16 to +18%). Manufacturing (up 7 to +16%) and retail (up 4 to +14%) were up modestly.
Agriculture (up 10 to -5%) remains slightly negative, though markedly improved.
“Perhaps the most promising thing about this new wave of optimism is that it’s broad-based, with sentiment improving across all five sectors, led by services, and across all major regions,” he says.
“Underpinning this are notable improvements in firms’ expectations for their own activity, employment, investment and profit.
“These are key drivers of economic expansion and bode well for the performance of small businesses and the broader economy in 2016,” Ohlsson says.
Regulation, low turnover, competition and lack of skilled staff were ranked as the big four challenges facing business owners over the coming year, with each cited by between 14% and 18% of respondents. These have regularly been rated the top four challenges in recent years.
“Small firms account for 90% of Kiwi businesses and employ nearly a third of all New Zealand workers.
“What owners are telling us is an important indicator of New Zealand’s prospects for the year ahead – pointing to new jobs, investment and growth in the Kiwi economy,” says Ohlsson.
The ANZ Business Micro Scope survey was launched in March 2012 to address a lack of ongoing research specific to the small business sector.
It covers a range of key business intentions and views on prospects for both respondents’ own businesses and the wider economy.
The figures above cover the quarter to 31 December 2015.