SME recovery uneven and fragile

Around a third of small and medium sized enterprises have work in the pipeline increasing, but more than a quarter have worsening fortunes according to a survey of more than 1000 businesses.

The MYOB Business Monitor Survey released today showed 29% of businesses have gained more work or sales than six months ago, while 26% of businesses have less work or sales than normal and 40% have the same amount.

MYOB general manager Julian Smith says that while business is picking up the recovery is uneven and fragile.

Bigger businesses with 20 staff or more are doing the best with more than 50% reporting pipelines that are higher, compared to only 27% of sole traders.

"It's the sole traders that are still bearing the brunt of the recession, they're just not seeing that revenue flowing in the back end of the year."

Smith says this is because many sole traders sell professional services which are generally over-represented as a sector. He says professional services have been significantly impacted by the recession and are having a longer recovery.

On the other hand the manufacturing and wholesale sectors and the retail and hospitality industries which were also hard hit by the recession, are bouncing back with the strongest improvements of 45% and 42% respectively in higher than normal levels of work or sales.

Metropolitan centres such as Auckland and Wellington are also faring better than rural areas where only 16% of businesses have more work or sales than normal.

Smith says these results show how uneven the recovery is.

The survey also looked at optimism for business in the next year, with 55% of businesses expecting the economy to recover, compared with 43% in July.

Smith says a lot of that optimism is being driven by the buoyancy that has returned to the manufacturing and wholesale sectors and the retail and hospitality industries.

There were strong levels of dissatisfaction with the government across the country with only a fifth of business owners thinking the government is doing a satisfactory job.

The smaller businesses were the most dissatisfied with the government's performance over the past year with changes to ACC, resource management legislation and exchange rate initiatives seen as the most "unhelpful" changes and initiatives.

However on the positive side, nearly a third of businesses recognised that government support has improved over the last year, while 20% saw government support as worse.

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