Local businesses are holding up reasonably well despite the effects of five quarters of recession, with 60 percent reporting revenue at the same level or improved over the past 12 months, according to the MYOB Business Monitor. The Monitor is a survey of over 1400 local businesses, representing the range of business sizes, from sole traders to larger businesses.
The survey is designed to research key areas of business performance, including current activity, profitability, cashflow and pipeline work. The research was conducted by Colmar Brunton for MYOB in May and June.
According to the survey, 35 percent of businesses have seen a fall in their revenue over the past 12 months, 38 percent have seen no change, and 22 percent have seen an improvement. Over the same period, 36 percent of businesses have seen profitability reduced, while 27 percent have seen an increase, and 33 percent reported profitability has remained the same.
MYOB New Zealand general manager Julian Smith says the results point to a levelling off of economic conditions, with strong indications of improvement over the next year and growth returning over the next 12 – 18 months.
“According to our research, just over half of all businesses expect a recovery is still over a year away,” says Smith.
“However, more than a third of all businesses expect to see improvements in the next three to twelve months.”
According to Smith, the majority of businesses (76 percent) don’t expect to see any further worsening of their own financial position in the next year, and 34 percent expect to see a revenue increase in the next 12 months.
“These expectations are supported by the amount of work businesses currently have in the pipeline – with 69 percent of those surveyed reporting the work they have planned for the current quarter is the same or more than usual,” says Smith.
Credit conditions in New Zealand also remain reasonable, according to the MYOB Business Monitor.
While only 19 percent of the businesses surveyed applied for finance over the last six months, nearly three quarters (74 percent) had their loan approved without modification, while only 5 percent had their application denied.
Most businesses (68 percent) are also reporting payment times have remained the same over the past six months, with less than a quarter finding an increase in the time it is taking to get paid by customers. Most businesses (72 percent) are getting paid in 30 days or less.
Smith says the survey indicates that businesses are doing as well as possible under the circumstances.
“Our research showed a worrying lack of awareness – particularly in the management and monitoring of cashflow – by many businesses. All businesses would do well to pay close attention to key indicators of business health if they are to take advantage of any opportunities for growth.”