US Tops World League Table For Super Growth Cos.
Media release, 13 June 2005
- US TOPS WORLD LEAGUE TABLE
FOR SUPER GROWTH COMPANIES
- NEW ZEALAND IMPROVES BUT STILL IN MIDDLE OF PACK
- Super Growth Companies focus more on staff retention, coaching and training
The percentage of "super growth" companies in New Zealand has doubled in a year, but we still lag behind other nations such as Australia, Canada, India and South Africa.
The US tops the list for the country with the highest proportion of "super growth"1 companies, overtaking last year's leader, Sweden, according to Grant Thornton International's Super Growth Index 2005.
Forty-eight per cent of companies in the US are super growth, up significantly on a second place ranking of 22 per cent in 2004. Hong Kong also has moved up the league table into second place, leaping from eighth place to record 28 per cent of companies as super growth. Hong Kong is closely followed by Australia (27 per cent), the United Kingdom (25 per cent) and Canada (23 per cent).
New Zealand sits in the middle of the super growth league, improving on last year's position. In 2004, only six per cent of New Zealand companies qualified for the super growth tag. In 2005, the figure went up to 13 per cent.
The Super Growth Index 2005, now in its second year, is a unique research project which forms part of a survey of more than 6,000 business owners worldwide commissioned by Grant Thornton, the network of leading advisers to medium sized businesses.
Last year's leader, Sweden, has moved down to joint tenth position alongside New Zealand, with 13 per cent of companies classified as super growth. At the bottom of the Super Growth Index are Russia (two per cent) and Turkey (one per cent).
Grant Thornton New Zealand spokesperson Peter Sherwin said: "The Super Growth Index shows an exceptional performance by US companies reflecting the vigorous growth in the economy in the US last year and the business opportunities presented by healthy consumer demand and an upturn in employment. It is encouraging to see New Zealand businesses improving their position on the back of similar factors.
"The litmus test will be this current period, as companies deal with lower business confidence and more challenging economic conditions," said Mr Sherwin.
"Super growth companies generally are optimistic about expectations for turnover, profitability and employment. They are also typically less constrained by issues such as cost of finance, shortage of working capital and shortage of long-term finance than companies as a whole.
"On this basis, higher interest rates may be a curbing factor in the current environment as might be the continuing shortage of skilled workers, which is definitely a constraint for super growth companies in general."
Table 1: Super Growth Index country comparison (% of companies): 2005/04
A super growth company is one which has grown considerably more than the average measured against key indicators. Super growth companies are far more optimistic about a number of indicators such as turnover (balance2 of 85 per cent for super growth companies compared to 63 per cent for companies in general), employment (balance of 73 per cent compared to 34 per cent) and profitability (balance of 62 per cent compared to 45 per cent).
Super growth companies are more focused on employment-related issues. Fifty-five per cent of super growth companies are also more likely to be focused on attracting and retaining staff than they were a year ago, compared to 50 per cent of companies in general. They are also more likely to consider reward systems and benefit packages important in attracting and retaining staff than companies as a whole (82 per cent compared to 67 per cent). Training and coaching is another area of difference, with 74 per cent of super growth companies say coaching and training for their top performers is important compared with 69 per cent for companies in general. Training for all staff is also key for super growth companies (66 per cent compared to 60 per cent).
Said Mr Sherwin: "There are clear lessons here. Be positive, look after your people and get the business appropriately funded - then you have a great platform to build and deliver your strategy."
About Grant Thornton
Grant Thornton is a leading international accounting and consulting group, comprised of independently owned and operated member firms, providing assurance, tax and specialist advice to independent businesses. Grant Thornton operates in 110 countries, bringing together 21,500 people in over 585 offices worldwide. In New Zealand, there are Grant Thornton offices in Auckland, Wellington, Christchurch, Dunedin and Whangarei.
Notes to editors
1. 'Super growth' companies are defined as those which have grown considerably more than the average. To identify 'super growth' companies, Experian's Business Strategies Division, the economics consultancy, took four key indicators to create a weighted index. The four indicators were: absolute growth in turnover (adjusted for inflation); the percentage growth in turnover (adjusted for inflation); absolute growth in employee numbers; the percentage growth in employee numbers. By this measure, 17% of all medium sized companies surveyed worldwide are classified as 'super growth'.
2. The balance is the difference between the proportion of businesses indicating an increase and those indicating a decrease. Percentages quoted are balance figures.