Mixed Fortunes For Regional Recovery

Mixed Fortunes For Regional Recovery: MYOB Business Monitor

The slow spread of the economic recovery has been mixed across New Zealand, with several regions, including Otago/Southland and the Bay of Plenty, facing more of a struggle over the last 12 months according to the latest MYOB Business Monitor, released today.

The MYOB Business Monitor is a nationwide survey of over 1,000 New Zealand business owners, across a range of small and medium businesses, from sole traders to mid-sized companies, and representing the major industry sectors. The MYOB Business Monitor is designed to research key areas of business performance, including profitability, cash flow and pipeline work, as well as business confidence.

Across the country, 35% of business owners reported revenue decreases in the last 12 months. In the main centres, 37% of Wellington and Auckland business owners show a fall in revenue over the past year, compared to just 30% in Christchurch.

Of the regions, businesses in Otago and Southland suffered the greatest fall in revenue since March 2009, with 41% of business owners seeing revenue decreases. Bay of Plenty business owners reported just over the average revenue decrease, at 37%, however the region also saw the lowest national revenue gain, with only 14% of local business owners seeing any increase in earnings over the last year.

MYOB New Zealand general manager Julian Smith says the recovery has been slower and more fragile across the country than many business owners predicted at the end of last year.

“The April MYOB Business Monitor has reinforced that businesses are still struggling with the effects of the downturn, and business owners believe there is some way to go yet before we see real improvements,” says Julian Smith.

“For many of the regions, the last year has been tough, and many business owners have seen profits fall.”

Otago/Southland again saw the largest number of business owners recording a fall in profit across the regions (38%), though fewer than those reporting a fall in profitability in Wellington (39%). The fall in profits also corresponded with Otago/Southland reporting the largest national drop in employment, with 18% of business owners reporting they had reduced staff number over the past year.

Mr Smith says although the last year has clearly been tough for many business owners in the regions, what has been impressive is the commitment and tenacity of Kiwi business people throughout the country.

“Although times have been hard, and even over the last quarter we have seen a decrease in optimism from business owners, Kiwi business people are a tough and resourceful bunch,” says Julian Smith.

“Over the next year, 48% of Kiwi business owners expect their profits to improve.”

“And good news for those business owners who have been doing it harder than most – 31% of business owners in Otago and Southland have more work in the pipeline in the next three months, compared to the national average of 29%, and 40% expect to see an improvement in profits over the next 12 months.”

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