New Zealand Super-Growth Companies at Record Low

Media Release
28 March 2007

New Zealand Super-Growth Companies at Record Low

New Zealand has slipped down the international league table in terms of its proportion of “super growth companies” compared with other nations.

In the latest results from the Grant Thornton International Business Report, New Zealand heads off only Brazil, Thailand, Spain and Botswana among the 32 countries surveyed.

New Zealand has slid from 15th a year previously to 27th equal, with only 8% of companies ranked in the “super growth”: category.

It is the worst performance by New Zealand in the four years that it has been part of the Grant Thornton survey.

The United States again tops the league with 44%, followed by Armenia (38%), Ireland (29%), the UK (26%) and South Africa (25%).

The Super Growth Index 2007, now in its fourth year, is a unique research project which forms part of the Grant Thornton International Business Report (IBR). The report covers the opinions of 7,200 privately held businesses in 32 countries and represents 81% of global GDP.

A “super growth” company is one which has grown considerably more than the average measured against key indicators including turnover and employment.

Said Peter Sherwin, Grant Thornton New Zealand spokesman on the international surveys: “This latest result really is a disappointment.

“We were concerned last year when New Zealand slipped to 15th. The latest outcome is not much short of woeful and probably underlines issues such as the drag that red tape continues to be. It also is another indicator of the stagnation in New Zealand exports.

“We have seen negative signs previously in other findings from the Grant Thornton surveys, including the perception that trade with China is seen more as a threat than an opportunity.

“It seems that the Government will have to do a great deal more than label 2007 as Export Year and hold seminars. It looks like it needs to focus more keenly on some fundamentals such as interest rates and the consequent higher Kiwi dollar, not to mention the enduring perception of red tape throttling businesses.”

Trends

* 63% of super growth companies believe globalisation presents more of an opportunity for their company, compared with 55% of all businesses in the survey

* super growth companies say the availability of a skilled workforce is considered to be a greater constraint than for companies in general (44% compared with 36%)

* red tape and regulation is another major concern for one in three (32%) super growth companies

* super growth companies are considerably less constrained in their ability to raise long-term finance with just 13% quoting this as a problem compared with 21% of companies overall.

Super growth companies are typically more positive on balance about their prospects than companies in general on a number of other indicators including: turnover - 87% compared with 70%; employment - 67% compared with 45%; and profitability – 66% compared with 52%.

ENDS

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