Kiwi’s set to outperform Aussie SMEs in 2014

According to new research, New Zealand SMEs are expecting to outperform Australian SMEs across a number of key measures this year – namely in confidence, revenue expectations and sector-based growth.

In its first Trans-Tasman business report, accounting software provider MYOB found that although confidence is high among Australian SME operators, New Zealanders are enjoying some of the highest levels of revenue confidence seen in the last decade.

One key confidence driver of Kiwi SMEs appears to be that the Australasian currencies are edging closer to parity. As a result, the report indicates that it may be time for local businesses to include our closest neighbour when considering new opportunities.

“In 2014, both countries enjoy the prospect of improving economic conditions. Here, businesses are more optimistic about growth in the year to August 2014 than they were in the previous 12 months, but the opportunities are probably at least six to 12 months behind where New Zealand sits,” MYOB CEO Tim Reed said.

Factors such as the winding down of the mining boom continue to influence local conditions, although investment in construction is on the rise, and the falling Australian dollar is helping both exporters and the tourism economy alike.

Across the ditch, the Canterbury rebuild and growth in Auckland is positively affecting trading conditions. Combined with the rural sector’s performance, MYOB is predicting 2014 to one of the most significant and sustained periods of growth in the country’s recent history.

The report, created as part of MYOB’s long-running Business Monitor research, also highlighted that Australia’s SME economy ran behind New Zealand’s in 2013.

In the year to August 2013, 39 per cent of Australian SME operators reported a fall in revenue while just 18 per cent recorded a revenue increase. In contrast, 30 per cent of New Zealand SMEs reported a revenue rise in the year to August 2013, while 24 per cent saw their revenues decline.

Although revenue falls outweighed gains in 2013, Australian operators have greater performance expectations. One quarter expect to see revenue improve in the 12 months to August 2014, while 22 per cent believe revenue will be down. New Zealand’s expectations are almost double that, with 43 per cent forecasting an increase in revenue in 2014 and just 10 per cent decline.

Reed noted 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.”

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