Many small businesses are pessimistic about the economy and next 12 months. Photo / 123RF
Many small businesses are pessimistic about the economy and next 12 months. Photo / 123RF
Small business confidence continues to slide with many firms bracing for the economy to worsen over the next 12 months.
Confidence among small and medium sized business owners was down 29 per cent in March, compared to 14 per cent recorded a year earlier, according to data from accounting software firm MYOB's annual business monitor survey.
Almost half of the businesses surveyed said they expected the New Zealand economy to decline in the next 12 months, while 19 per cent said they expected it to improve.
Businesses operating in finance and insurance sector were the most pessimistic about the economy, the data shows, along with those in the professional services industry.
Though all industries were recorded as in 'negative territory', businesses in the manufacturing and wholesale sectors had the highest hopes for the economy in the next 12 months.
Half of all Christchurch businesses surveyed, along with 47 per cent of businesses in Auckland, expected the economy to deteriorate in the coming year.
Businesses located in the country's capital were the most optimistic about the economy, with 44 per cent enjoying increased earning in the last 12 months.
In total, however, fewer businesses reported increased earnings in the last 12 months.
Ingrid Cronin-Knight, MYOB's New Zealand country manager, said a range of issues were weighing on business confidence, including threats to international security, the US-China trade war and the Brexit debacle.
Minimum wage is set to increase by $1.20 and leave entitlements for victims of domestic abuse will come into effect from April 1, which will also be felt by small business owners.
"The key issue... will be maintaining that momentum when faced with ongoing uncertainty at home and the potential for any number of issues blow up overseas, harming the international economy," Cronin-Knight said.
"However, business operators in New Zealand's SME sector are demonstrating how resilient they are in the face of both local and global pressures."
Ingrid Cronin-Knight, MYOB's New Zealand country manager. Photo / Supplied
Around 27 per cent of Auckland businesses surveyed reported a drop in revenue compared to 12 months ago, 25 per cent reported their revenue had increased.
In Christchurch, 36 per cent of business said their revenue had increased compared to same time a year earlier and 22 per cent said it had decreased.
Revenue growth was recorded as the strongest in the manufacturing and wholesale sector.
Just 32 per cent of all businesses surveyed expect their revenue will improve in the next 12 months compared to 38 per cent recorded a year earlier.
Most people will weather the storm and soldier on.
Business Mentors chief executive Craig Garner said small business owners tended to be reactionary to environment.
"Externally it hasn't been a wonderful time. We've seen the fires in Southland, we're moving out of summer and heading into winter, the whole Brexit debacle has got everyone saying 'what the hell is going on', US politics of course. On a global platform, there is just so much uncertainty," Garner said.
"On top of that, we've still got issues of finding skilled labour - that's certainly making a big difference, and a lot of people are struggling."
Garner said business confidence tended to slow down at this time of the year, but acknowledged the past year had not been a positive one. "There's not a lot to hang your head on to say this is a great time to be in business."
He agreed that the economy and export would likely slow in the coming year but not drastically.
"I personally see it as a cycle, most people will weather the storm and soldier on."
