MYOB: A third of businesses report revenue decreases

Around a third of small and medium businesses (SMEs) have reported a revenue decrease over the last 12 months according to the April MYOB Business Monitor.

MYOB New Zealand general manager Julian Smith says the effects of the New Zealand economy's modest growth have been slow in filtering through to most businesses.

Almost half (47%) of the businesses reporting a decrease have seen revenue fall by between 20 - 39%.

More businesses (35%) have also reported a corresponding fall in profitability. However, small businesses are more likely to have seen profitability improve (41%).

Smith says business owners appear to have adopted a more conservative view of the recovery, as more report a revenue decrease over the past 12 months.

Less than half (49%) of business owners are now expecting a full recovery within 12 months - down 6% on November 2009. Across the Tasman, business confidence has also fallen by 4%.

Smith says this seems to reflect Kiwi business owners' actual experience of the recovery, as more businesses report decreased revenue and profitability - and more modest gains in pipeline work - at the end of the 2009/10 financial year.

He also acknowledges that many of the concerns businesses held before the recession have re-emerged.

"For the first time in almost a year, fuel prices are again expected to put the most pressure on business owners in 2010," says Smith.

"Cash flow is still expected to be a problem - particularly for micro businesses - while aspects of the financial markets: the exchange rate, interest rates and access to business finance, have again come to the fore as key business pressures."

"The picture this latest MYOB Business Monitor is painting is one of more cautious optimism among Kiwi businesses."

Smith believes the signs of a recovery - particularly in short-term sales and longer-term growth - are definitely there.

"However, many businesses are still working through the effects of the recession and seeing a longer road to recovery than perhaps they were pre-Christmas."

The MYOB Business Monitor is a nationwide survey of over 1,000 New Zealand business owners.

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