The first signs of an economic slowdown are being noticed by the small and medium sized enterprise (SME) sector in New Zealand, the latest MYOB Business Monitor survey of more than 1000 businesses nationwide shows.
The SME operators are expecting the economy to slow over the coming year but their current performance and forecasts for the coming year suggest they will avoid anything more serious.
Over the next 12 months, 34% of SME operators expect their business revenue will increase, down from 40% in the February survey. A further 41% are forecasting stable revenue.
According to the nationwide survey conducted for MYOB by Colmar Brunton, the number of businesses expecting revenue to drop over the next 12 months has nearly doubled from 11% in February to 21%.
MYOB New Zealand general manager James Scollay said while both global and local economic factors were weighing on local SME operators, they were not panicking.
''We are seeing a considerable rise in the number of businesses who expect their own growth to come off current levels but more than a third still expect to grow in 2016.''
Growth levels for SMEs had remained consistent over the last six months, with 31% reporting improved revenue in the year to August compared with 32% in February. Forty one percent had maintained stable revenue, down from 44% in February, Mr Scollay said.
Work booked for the next three months had shown a similar pattern, with 31% saying they had more work on the books, down from 37% in February. Nearly a quarter had less work on, a jump from 13% in the earlier survey.
More than half the operators expected the economy would decline in the next year - significantly for 12% - while 21% expected it to improve.
Fewer business operators in the major centres expected the economy to decline.
''One of the notable areas in the research is the changing growth pattern in Christchurch, where the proportion of businesses reporting revenue growth has fallen 16% since our last survey to be nearly equal with those seeing revenue fall.''
That highlighted the difference from the city's rebuild now it had reached its predicted plateau, he said.
After coming off previously unseen highs in activity, Christchurch businesses remained confident of growth, with 38% forecasting better revenue next year.
Also encouraging was the steady level of growth being seen in Auckland, still the driver of New Zealand's economy with 37% of businesses in the city reporting improved revenue over the last year.
And while it could be clearly seen some regions were already feeling the effects of the slowdown in the dairy industry, other rural areas, such as Northland and the Manawatu/Wanganui region, were holding up, Mr Scollay said.
Underscoring the level of confidence remaining in the SME sector, hiring intentions had lifted slightly.
Nine percent of businesses said they planned to take on more full time staff next year, rising from 7% in February.
Eleven percent would hire more part time employees and 20% planned to put more in their employees' pay packets in the year to August 2016.
At a glance
• More than half of New Zealand SMEs expect economy to decline.
• Christchurch economic activity starting to slow as rebuild reaches a peak.
• The slowdown does not mean SMEs are hitting panic button.
• Majority of SMEs are forecasting either growing or stable revenue next year.
