Most SMES don't intend hiring in next six months, Westpac monitor shows
Only 13% of New Zealand's small to medium businesses intend hiring more staff in the next six months.
Hot Topic
Infrastructure
Only 13% of New Zealand's small to medium businesses intend hiring more staff in the next six months although half are confident of growth in their operations, according to the Westpac Business Growth Monitor.
The monitor measures the confidence that more than 500 SMEs (with less than $5 million turnover) have in the economy, their growth plans, hiring intentions and funding needs.
Results for the December 2015 quarter showed only 13% intend increasing staff in the next six months while 16% plan to do so in the next year. The construction and primary sectors were the most confident of hiring over the next year and most intended doing so to service or retain customers.
The reluctance to take on staff may be related to concerns about how strong economic growth will be over the coming year, Westpac head of specialist business, Steve Atkinson.
"Some 39% believe it will be unstable or in decline over the next six months against 43% who think it will grow," Mr Atkinson said. "One conclusion could be that most are looking to grow but their view on the economy is a red flag against hiring more staff."
Two-thirds of Auckland SMEs had more confidence in the economy, compared with 38% for the rest of New Zealand.
Nearly half of the SMEs surveyed expect to grow revenue in the next six months while 32% don't, and those with the highest confidence are in the manufacturing and business services sectors.
Just under two-thirds of businesses intending to grow have a business plan to achieve their goals, with trade, transport and tourism, primary industries and manufacturing being the most prepared.
Of those businesses expecting revenue growth, 19% plan to borrow, mainly to buy assets or new equipment and only 16% are looking for working capital.
The majority of businesses not expecting to grow cited work-life balance or retirement plans as reasons.
Creating an exit or succession planning remains a weakness among SMEs, Mr Atkinson said.
(BusinessDesk)
Fiona Rotherham
Wed, 27 Jan 2016
Wed, 27 Jan 2016
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Most SMES don't intend hiring in next six months, Westpac monitor shows
54998