Uneven recovery for small businesses 

Source: ONE News

• WATCH the video (3:22)

Almost a third of small businesses say the level of work or sales they have in the pipeline is increasing, but at the same time, more than a quarter of those surveyed are reporting worsening fortunes.

The latest MYOB Business Monitor survey shows 40% of businesses reported the same level of work or sales in the pipeline, and 29% said more work is coming in - an increase of about 5% on the last survey in June.

However, MYOB general manager Julian Smith says 26% of businesses reported less work or sales than normal, particularly in rural areas where only 16% of businesses have more than usual coming in.

Metropolitan centres, says Smith, are faring better.

"We're seeing a bit turnaround in the fortune of Auckland based businesses and Wellington based businesses. Earlier this year they were suffering and they're certainly reporting higher pipelines (now)," he says

The survey shows improvement has also been uneven across business size, with 50% or medium sized businesses reporting more work or sales in the pipeline than expected compared with 27% of sole traders.

Sector-wise, the strongest improvements are in the wholesale and manufacturing industry and hospitality sector, with 45% and 42% respectively saying they have higher than normal work or sales in the pipeline.

"We're seeing the manufacturing and wholesale sector, and the retail and hospitality sector bringing a lot of the buoyancy back. They were two sectors that have been quite hard hit by the recession, so they're driving a lot of that optimism," says Smith.

At the other end of the spectrum, just 12% of businesses in agriculture, forestry and fishing say there is more work or sales in the pipeline than normal.

Despite the disparity between areas, business sizes and sectors, Smith says, the survey shows steady improvement in the work and sales pipeline overall.

Outlook

Of the 1,000 businesses surveyed, only 22% reported an increase in revenue over the last 12 months. Thirty-six percent of businesses said revenue was unchanged and 36% reported a decline, slightly higher than the 35% reported in July.

However, businesses are largely optimistic for the coming year, with 44% expecting to see a lift in revenue and only 10% forecasting that their revenue will decline over this period.

Optimision has returned strongly to businesses in the main centres: 50% of businesses in Auckland and 46% of businesses in Wellington expect revenues to increase over the next 12 months compared with 39% of businesses across the rest of the country.

Smith says sectors like retail and hospitality that were hit hard during the recession are reporting strong increases in confidence for the year ahead.

Business and the government

The survey also polled businesses on their satisfaction with the National-led government.

More than a third of businesses said they were unhappy with the level of government support of business over the last year.

Businesses cited changes to ACC, resource management legislation and exchange rate initiatives as the most unhelpful government changes and initiatives.

"Though it's pretty closely split, more business owners think the regulatory environment has got worse than improved over the past year," says Smith.

Though, Smith says, the level of satisfaction varied across business size, location and sector.

Forty-five percent of businesses with between 20-200 staff believe the government's level of support has improved over the last year.

"Bigger businesses are a lot happier, smaller businesses seem to have a lot more dissatisfaction," he says.

Businesses in Wellington are the most unhappy with the government's level of support, while those businesses outside the main centres were comparatively more satisfied.

Sectors which have born the brunt of the downturn, such as construction and trades, were among the most disatisfied sectors.

Smith says the good news for the government is that nearly a third of businesses believe government support has improved since last year, compared with 20% who believe it is worse.