Year starts on more confident note

Pam Newlove
Pam Newlove
Business owners should be relishing the thought of returning to work, given that New Zealand business confidence is well up on last year, according to the Grant Thornton IBR survey.

Grant Thornton New Zealand partner Pam Newlove said New Zealand confidence had lifted 22% on the same time last year to 58%, well ahead of that of Australia, where confidence was up only 7% to 31%.

On an international scale, New Zealand ranked 10th in business confidence, just behind Norway on 60% and ahead of Canada on 47%. The United Arab Emirates heads the list with 88%.

Ms Newlove said New Zealand business owners had accepted that the tough grind of the past two years was the new norm and they were knuckling down and doing the business.

''They have learnt to be smarter about how they do business rather than lament the recent difficult times. Successful operators are identifying their niche products or services and capitalising on opportunities and securing market share that way.''

Australia might not have suffered the level of pain endured in New Zealand through the global financial crisis, but with the slowdown of China and the fall in commodity prices, indicators had turned south in the ''lucky country'', with a slew of major redundancies in some of the larger companies, she said.

Employment aspirations showed 34% of New Zealand companies were looking to employ more staff in 2013, compared with only 8% in Australia.

New Zealand companies had nearly twice the level of optimism being experienced in Australia when it came to forecast revenues and profitability.

Ms Newlove said 70% were expecting increased revenue over the next 12 months and 58% were expecting an increase in profitability. For Australia, the figures were 36% and 34% respectively, another indicator of the shape of the Australian economy.

Lack of skilled labour (38%), red tape (31%) and a shortage of working capital (28%) were all cited as constraints to growing and expanding New Zealand businesses.

Red tape was interesting, she said. Although it was noted as a constraint, it was less of a concern in New Zealand than in many other countries. New Zealand was often seen as an easier place to do business relative to other jurisdictions, she said.

''The overall picture is one of an improving economy but there are some key messages that have come out of the survey. Businesses must look after and retain their good staff, continue to educate them and continue to invest energy and time into maintaining and managing customer relationships,'' Ms Newlove said.

The survey found hopes for a strong start to a global economic recovery in 2013 were diminishing as business confidence in mature economies continued to fall, caused by concerns over the United States ''fiscal cliff'' and ongoing fears over the eurozone's prospects.

Global business optimism stood at just net 4% heading into the new year. That halted a rally in confidence seen in the first half of last year, when global business optimism reached 23%, and brought it nearer to the 0% level seen at this time last year.

The IBR survey was of both listed and privately held businesses. The data was drawn from interviews with 3200 businesses from all industry sectors across the globe in November and December. The target respondents were chief executives, managing directors, chairmen or other senior executives.

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