"The state of the local economy directly impacts their confidence in the future of their business and they take less risk in investing in new staff members," Scollay said.
Given the high number of Kiwis who were or could be employed by SMEs, weak hiring intention was an obvious concern.
"This is something we hope to see change so more households can enjoy the benefits of improved growth spreading across the whole country."
On a more positive note, layoffs in the sector are looking unlikely in the year ahead.
MYOB said the proportion of SME owners planning on maintaining existing staff levels rose to 72 per cent, from 66 per cent over the previous two years.
"This is good news for the around one-third of all New Zealanders employed by a small to medium business owner, giving them confidence about their employment prospects," Scollay said.
According to a monthly survey by ANZ, business confidence has been been on a strongly rising trend since the middle of last year.
The most recent survey showed confidence reached its highest level since April 1999, with a net 53 per cent of respondents expecting the general business situation to improve over the year ahead, up from 50 per cent in June.
Scollay said mid-sized businesses - those with more than 20 employees - were giving some cause for hope in the SME employment market.
Of the employment opportunities arising, most were in this sector, he said.
"This is a very positive sign, not only because it signals more direct employment opportunities for New Zealanders, but also because the growth of mid-sized businesses tends to flow through to the many SMEs they work with," he said.
