2013 bodes well for Kiwi businesses

Business owners should be relishing the thought of returning to work in the New Year given that New Zealand business confidence is indicated to be well up on last year, according to the Grant Thornton IBR survey. 

New Zealand sits 10th on the world business optimism table.

Pam Newlove, Co-Chair and Partner, Grant Thornton New Zealand, said that business confidence has lifted 22% on this time last year to 58%, well ahead of neighbours, Australia, where confidence was up only 7% to 31%.

“New Zealand business owners have accepted that the tough grind we’ve been going through over the last couple of years is the new norm and they are just knuckling down and doing the business. They have learnt to be smarter about how they do business rather than lament the recent difficult times. Successful operators are identifying their niche products or services and capitalising on opportunities and securing market share that way.

“Australia may not have suffered the level of pain that we endured during the global financial crisis, but with the slowdown of China and the fall in commodity prices, indicators have turned south in the ‘lucky country’ with a slew of major redundancies in some of the larger companies.

“Employment aspirations show that 34% of New Zealand companies are looking to employ more staff in 2013 compared with only 8% in Australia.”

New Zealand companies have almost twice the level of optimism currently being experienced in Australia when it comes to forecast revenues and profitability.

“Seventy percent were expecting increased revenue over the next 12 months and 58% were expecting an increase in profitability. For Australia the figures were 36% and 34%, another indicator of the shape of their economy,” she said.

Lack of skilled labour (38%) red tape (31%) and a shortage of working capital (28%) were all cited as constraints to growing and expanding businesses.

“Red tape is interesting, although it is noted as a constraint, it is less of a concern in this country compared with many others. Interestingly, New Zealand is often seen as an easier place to do business relative to other jurisdictions.

“The overall picture is one of an improving economy but there are some key messages that have come out of the survey. Businesses must look after and retain their good staff, continue to educate and upskill them and continue to invest energy and time into maintaining and managing customer relationships,” she said.