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The annual MYOB small and medium enterprise survey shows that SME sector of New Zealand remains wary about the possibility of further economic recovery in 2021.
The survey showed that nearly half (41%) of SMEs believed New Zealand’s economy would decline this year, while 34% of SMEs are more hopeful, expecting conditions to improve and 23% expecting the economy to remain the same.
Last year, 79% of SMEs thought that the economy would weaken in the following 12 months.
The MYOB Business Monitor is a platform for New Zealand business owners to express themselves. It's a national survey of over a thousand sole traders, micro-, small-, and medium-sized business owners from a variety of industries.
Source: © Dogfella | Megapixl.com
It is intended to investigate core aspects of the company performance, such as profitability, cash flow, and pipeline work, as well as business trust and satisfaction with government funding.
The following are some of the main indicators presented:
- Perceptions of the current and the future performance of business in NZ.
- Perceptions of the outlook for the NZ economy.
- Perceptions of government support for business in NZ.
- Business outlook.
Krissy Sadler-Bridge, MYOB's SME senior sales manager, stated that while things were finely stable, return to optimistic thinking and revenue for some businesses were much greater than what might have been predicted last year. However, many factors continue to weigh down the confidence of local SMEs as they look to pass through the months ahead.
The Biggest influencers of SMEs’ confidence levels
According to the new Business Monitor findings, the transportation and logistics industry (50% expects the economy will contract this year), manufacturing and wholesale (48%), and finance and insurance (45%) sectors are less optimistic about the economy's future performance than the SME average.
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Thirty six per cent of SMEs said their profitability had decreased in 3 months leading up to March 2021, with 12% saying it had decreased significantly, while a fifth said earnings had increased since the start of the year.
ALSO READ: Why New Zealand registered trade surplus of $33 million for March 2021
Further, local factors were having the biggest impact on their confidence levels about the economic prospects in 2021, as per SMEs.
Source: © Olivier26 | Megapixl.com
The prospect of more lockdowns was cited by 59% of firms as the most significant economic threat, led by vaccination roll-out (34%), consumer confidence (33%), median house prices (31%), and low interest rates (29%).
DO READ: Are the Vaccines Working? When will Covid-19 end?
International factors influencing the confidence included illness (59%), the effect of border controls on trade (56%), the possibility of a global recession (42%), ties with China (26%), and climate change (19%).
SMEs are still of the view that COVID-19 impact continues to impact their regular operations.
