Accounting and business consultancy Grant Thornton says confidence is high and bodes well for 2013.
Business owners should be relishing the thought of returning to work in the New Year given that business confidence is indicated to be well up on last year, Grant Thornton New Zealand co-chairwoman and partner Pam Newlove says.
Grant Thornton’s latest International Business Report (IBR) shows New Zealand is 10th on the world business optimism table at 58%, up 22 percentage points on a year go. By contrast, confidence in Australia is up only seven points to 31%.
“New Zealand business owners have accepted that the tough grind we’ve been going through over the last couple of years is the new norm and they are just knuckling down and doing the business,” Ms Newlove says.
“They have learnt to be smarter about how they do business rather than lament the recent difficult times. Successful operators are identifying their niche products or services and capitalising on opportunities and securing market share that way.
“Australia may not have suffered the level of pain that we endured during the global financial crisis, but with the slowdown of China and the fall in commodity prices, indicators have turned south in the ‘lucky country’ with a slew of major redundancies in some of the larger companies.
“Employment aspirations show that 34% of New Zealand companies are looking to employ more staff in 2013 compared with only 8% in Australia.”
New Zealand companies have almost twice the level of optimism currently being experienced in Australia when it comes to forecast revenues and profitability.
“70% were expecting increased revenue over the next 12 months and 58% were expecting an increase in profitability. For Australia the figures were 36% and 34%, another indicator of the shape of their economy,” Ms Newlove says.
Lack of skilled labour (38%) red tape (31%) and a shortage of working capital (28%) were all cited as constraints to growing and expanding businesses.
“Red tape is interesting, although it is noted as a constraint, it is less of a concern in this country compared with many others. Interestingly, New Zealand is often seen as an easier place to do business relative to other jurisdictions.
“The overall picture is one of an improving economy but there are some key messages that have come out of the survey. Businesses must look after and retain their good staff, continue to educate and upskill them and continue to invest energy and time into maintaining and managing customer relationships,” she says.
The global outlook
The IBR reveals that global business optimism stands at just net 4% heading into the New Year. This halts a rally in confidence seen in the first half of 2012, when global business optimism reached 23%, and brings it nearer to the 0% level observed this time last year.
The top 10 most optimistic countries
1 United Arab Emirates
7 The Philippines
10 New Zealand
The Grant Thornton IBR provides insight into the views and expectations of more than 12,500 businesses a year across 44 economies. It draws upon 21 years of trend data for most European participants and 10 years for many non-European economies