Small businesses remain upbeat about economic outlook - MYOB

Small business confidence is up on stronger-than-expected revenue.

Confidence in the economy remains strong among New Zealand’s small businesses following a solid performance in the last quarter of 2023, the latest MYOB Small Business Snapshot has found.

Many of the respondents are forecasting an increase in revenue over the next year.

The MYOB SME Snapshot is a nationwide survey of over 500 SME (small and medium enterprises) owners and decision-makers.

Conducted between January 23 and February 5, it showed 44 per cent of SMEs believe the economy will improve over the next 12 months, while just over a third believe the economy will decline, and 19 per cent expect it will remain the same.

This optimism, which represents a marked turn-around on the same period last year, may have been boosted by a better-than-expected final quarter of 2023 and improved revenue results, said MYOB SME general manager Emma Fawcett.

Almost two-fifths (39 per cent) of SMEs surveyed described their performance in the three months to the end of January 2024 as above expectations, while 37 per cent said their performance was as expected. A quarter of those polled said their performance fell below expectations, and the remainder were unsure.

Additionally, a third of the SME operators surveyed said their revenue had increased compared to this time a year ago, while 39 per cent said it had held steady at the same levels, and just over a quarter reported falling revenue.

With revenue for many SMEs up on this time last year and with even more (40 per cent) expecting to see an increase over the next 12 months, SMEs were heading into 2024 with a solid sense of optimism,” Fawcett said.

“Despite stronger sales performances for some local businesses, we know that there are a range of economic challenges that continue to remain more top-of-mind for many SMEs,” she said.

The rate of inflation, business profitability and cash flow, as well as interest rates, were called out by local SMEs polled as their top three business concerns over the next six months.

On the technology front, it was encouraging to see local SMEs turn to business intelligence (BI) and AI-powered tools to do things like generating reports, processing invoices, tracking expenses, and financial forecasting, Fawcett said.

“Our latest insights show that 30 per cent of SME operators are currently using AI or BI-driven solutions, and a further 24 per cent are investigating their use for implementation in the coming year.”