Media Release
11 December 2012

Kiwi Small Businesses Less Confident About 2013 - Survey

A survey has revealed that New Zealand small businesses are less confident about their prospects than they were a year ago. And while 28 per cent of small Kiwi firms expect the economy to shrink in 2013, 64 per cent still expect to see some growth in their own businesses.

The results of the CPA Australia Asia-Pacific Small Business Survey 2012 show that, for most small businesses across the region, continued tough economic conditions are weighing on confidence levels (see Figure 1).

CPA Australia Country Manager for New Zealand David Jenkins said while New Zealand small business confidence levels are comparatively low, they are still slightly better than their counterparts in Australia and Hong Kong. “Overall the results show that small businesses in New Zealand, Australia and Hong Kong have similar expectations of little or no growth. This isn’t surprising if you look back over the past year. Only ten per cent of New Zealand small businesses increased employee numbers, and only 13% say they will hire in 2013 – the lowest in the region.

“But on the positive side, 64% of Kiwi small businesses do expect to see some growth in 2013.”

Mr Jenkins said that demographics may be playing a part in the results. “The survey clearly shows that growth and employment expectations are higher in younger businesses and younger respondents. It follows that the higher proportion of older businesses and older respondents in New Zealand – and Australia for that matter – may have affected their responses.”

Another key area explored by the survey is access to finance. Mr Jenkins says it was interesting to note that while the majority of New Zealand small businesses expect some growth in 2013, only 40% say they will need additional funding to help achieve it.

“The most common activities being considered by Kiwi small businesses to support their growth in 2013 are increased marketing and promotion activity (33 per cent say they will undertake such activity), following up on late payments from customers (36 per cent) and debt reduction (24 per cent), which are all positive signs of committing to growth.”

The survey results highlighted a number of important issues for policymakers to consider, says Mr Jenkins. “Small businesses are the engine room of our economy and so it’s important that regulators and policymakers understand what they can do to help fuel this growth.

“Firstly, responsible economic management by governments builds small business confidence and the likelihood of hiring new staff. Secondly, reasonable access to finance helps fuel small business growth, and this needs to be monitored regularly. Thirdly, it must be as easy as possible to set up and run a small business, especially for young people who tend to be highly motivated and more confident about growth. Governments must keep focusing on reducing the compliance burden.

“Finally, the results of our survey over the past four years indicate that business skill levels vary greatly amongst small businesses. Providing access to knowledge and training on business management will drive greater productivity and growth. Governments should therefore work with education institutions, industry associations and accountants to ensure these resources are available to our small businesses.”

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Notes:
1. The CPA Australia Asia-Pacific Small Business Survey 2012 was conducted with 1,764 owners or senior managers of businesses with less than 20 employees in Australia, Hong Kong, Malaysia, Singapore, New Zealand and Indonesia. The New Zealand sample comprised 258 participants. The survey measured growth prospects, hiring intentions, access to finance and management activities, and was conducted in October 2012. The full report can be accessed here.

2. A fact sheet summarising the New Zealand results is attached to this email. An image of David Jenkins is available on request.

3. Relevant graphs from survey, as referenced in media release above:
Figure 1: Small business expectations for their business – 2009 to 2012

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Figure 2: Percentage of small businesses that have a business loan – 2009 to 2012

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Figure 3: Ease in obtaining funds – 2001 vs 2012

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