Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

SMEs tightening belts

SMEs tightening belts and highlighting the need for careful planning


Small-medium business are tightening their belts and putting pen to paper to plan their way through a tightening a number of challenges facing the economy according to the findings of the latest Westpac Business Growth Monitor.

The biggest drop in confidence came from medium size businesses with 10+ employees where expectations of growing the business have plummeted nearly 20 percent from the last quarter (49% vs. 68%). In the quarter to 31 March, the Westpac Business Growth Monitor measured the confidence of more than 500 SMEs (with less than $5 million turnover) on the economy, their plans to grow, intentions to create jobs and need for funding.

Westpac’s Head of Specialists Commercial, Steve Atkinson said businesses are hunkering down and pausing for a breath to an extent. As they plan their future carefully over the next year or so.

“There are a lot of factors now in play that businesses don’t have control over – the Chinese economy, uncertainty in Europe, the US elections and closer to home the dairy downturn.

“Businesses are starting to put the dots together and trace these uncertainties back to their own businesses and their own future”.

While the intention to hire staff has increased (13% vs 8% in Q1), Atkinson noted that fewer businesses are looking to commit to large loans and it appears business are looking at ways to self-fund more.

The monitor showed that overall, businesses are increasingly cautious. Of those looking to borrow in the next six months, only 31 percent are looking for loans of over $50,000, compared to 45 percent in the previous quarter – a 14 percent fall in $50k + loans in just three months. “This is hardly surprising in an economy linked so heavily to the primary sector, but overall we’re being kept on a relatively even keel by buoyed confidence in Construction, Trade, Transport and Tourism, where businesses are hiring more.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

“While only 35 percent of primary sector businesses expected to grow in the next six months, trade, transport and tourism businesses were showing more optimism, with 17 percent reporting increased employment over the last three months”.

“In the last quarter we’ve seen a six percent increase in the number of businesses who have a business plan in place to achieve their growth goal (67% vs 61%).”

Steve Atkinson said that SME businesses owners have not traditionally been great succession planners, but we’re seeing stronger considerations around retirement.

“The latest survey shows there are even more owners looking to exit their business over the next two years (up from 10% to 12%).

“This all comes back to the importance of planning. SMEs can be extremely vulnerable to wider economic factors, so business should always plan to prosper throughout the economic cycles and be thinking about their retirement from the get-go. It’s about being prepared for all economic conditions and all stages in life.”

-Ends-

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.