2014 will be a strong year for trans-Tasman SME business rivalry, with MYOB’s inaugural Trans-Tasman business report, released today, suggesting that New Zealand SMEs will outpace their Australian counterparts by a considerable margin this year.
With the Kiwis riding a wave of confidence as the Australasian currencies grow closer to parity, it may be time for local businesses to include our closest country across the ditch when considering new opportunities. According to MYOB’s research, New Zealand SMEs are expecting to outperform Australian SMEs across a number of key measures this year – including confidence, revenue expectations and sector-based growth.
The company’s first Trans-Tasman business report highlights that Australian SME business owners expect to see more revenue growth in 2014 than they did in the prior corresponding period, while across the Tasman, New Zealanders are enjoying some of the highest levels of revenue confidence seen in the last decade.
MYOB CEO Tim Reed said that while Aussie businesses are more optimistic about growth in the year to August 2014 than they were in the previous 12 months, the opportunities here are around six to 12 months behind where New Zealand currently sits.
“Although the winding down of the mining boom remains a concern, investment in construction is on the rise, and the falling Australian dollar is helping both exporters and the tourism economy,” Reed said. “In New Zealand, the effects of the Canterbury rebuild and growth in Auckland, combined with the rural sector’s performance, is underpinning what will likely be one of the most significant and sustained periods of growth in the country’s recent history.”
The comparison report, created as part of MYOB’s long-running Business Monitor research, highlights that Australia’s SME economy ran behind New Zealand’s in 2013. In the year to August 2013, 39 per cent of Australian SMEs reported a fall in revenue, while just 18 per cent recorded a revenue increase. In contrast, 30 per cent of Kiwi SMEs reported a revenue rise in the year to August 2013, while 24 per cent saw their revenues decline.
“Where the differences are particularly evident is in the relative performance of key sectors,” Reed said. “New Zealand’s construction, retail, manufacturing and rural sectors are all expecting to outperform Australia’s. Here, 17 per cent of manufacturing and wholesale businesses, and 17 per cent of construction and trades, expect to see a revenue increase in the year to August 2014. This compared to 59 per cent and 44 per cent in New Zealand.
“Only in Australia’s finance and insurance industry is revenue performance expected to slightly outstrip New Zealand’s. 36 per cent of SMEs in this sector expect revenue to improve in 2014, compared to 35 per cent in New Zealand.”
Trans-Tasman rivalries aside, Reed added that there is plenty of good news for Australian operators in both economies.
“While we’re fierce rivals on the sporting field, we are great mates elsewhere. New Zealand remains one of our strongest export markets. It’s a fantastic source of tourism revenue and a strongly performing extension of our finance sector. Positivity in the New Zealand economy means inevitable opportunity for local businesses.
“Despite the challenges and pressures both countries face, SME operators have proven themselves to be continually resourceful and resilient, regardless of the prevailing economic conditions. And the good news for Australasia is both countries are poised to end 2014 in a better place than where they started.”
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