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ANZ Business Micro Scope - September 2016 print Print

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Small businesses are showing more confidence in the economy heading into the summer months.

Good weather ahead - small firms show confidence

Spring is in the air for New Zealand’s small businesses, many of who are seeing fine economic weather ahead. However, a lack of skilled staff is putting a strain on growth, according to ANZ’s quarterly Business Micro Scope survey of small firms.

A net 17% of respondents - up from 8% in June - say they are confident about the business environment in the year ahead. Within this group, businesses employing 6 – 20 employees were the most optimistic, jumping 15 points to a net 26%.

The ANZ composite measure – a key proxy for growth – lifted to +15 during the quarter. The composite measure is based on firms’ activity outlook, hiring, investment and profit expectations, all which improved in the September quarter.

“With summer around the corner, the confidence of small firms has bloomed. Intermediate-sized businesses have strong hiring and investment intentions, profit expectations, and a net 42% of this group expect business activity to lift,” said Andrew Webster, General Manager Retail and Business Banking.

“Micro sized businesses are less euphoric, but are still heading into the warmer months feeling more positive about levels of business activity, investment and profits.

“While buoyant sentiment is a good signal for economic growth, concern about finding skilled staff continues to dampen an otherwise sunny forecast. This obstacle is particularly significant for small firms whose hiring intentions are at their highest in over a year.

“The small firm composite measure improved in four of the five regions, with Wellington storming out to +28%, up from +19% in June. Canterbury lifted 9 points over the quarter while North Island businesses outside of Auckland and Wellington fell.

“Prospects for four of the five sectors improved in September with construction and services leading the way.”

Read the full report (PDF, 171KB)

Highlights from the September 2016 ANZ Business Micro Scope survey of small firms:

[Net percentages reflect the balance of sentiment, i.e. percent positive minus percent negative responses]

  • Small firms’ confidence in the business environment lifted to +17%, from +8% in June.
  • The composite measure (a growth indicator taking in firms’ own activity, employment, investment and profit expectations) rose 2 points to a one-year high of +15%.
  • Growth prospects for Wellington (+28%) and the South Island outside Canterbury (+19%) are the highest, followed by Auckland (+18%) and Canterbury (+10%).
  • The Services sector (up 1 point to +25%) led the way, followed by Construction (up 6 to +23%). Manufacturing reversed its June slide to pick up 3 points to +19%, but Retail continued downward (down 4 to +7%). Agriculture lifted slightly though dairy concerns are still weighing at -10%.
  • Lack of skilled staff, Competition and Regulation are at the top of business owners’ concerns. 

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