Shock Fall in Industry Output, Exports Deepen Economic Gloom
Shock Fall in Industry Output, Exports Deepen Economic Gloom Reuters

The small and medium-sized business sector (SME) in New Zealand has clocked strong revenue growth, which is a five-year high. This was revealed in a survey conducted by Trans-Tasman accounting software firm MYOB, reported Stuff. Co. Nz.

The surveyed studied more than 1000 New Zealand SMEs and found 39 per cent had peak sales in the 12 months to August, which was 9 per cent higher than the same period in the previous year. In March this year, 35 per cent of SMEs reported higher revenue growth.

Vital Sector

In New Zealand, SMEs make up 97 per cent of the total businesses. This is stated in the first Small Business Sector report, released by the Ministry of Business and Employment. The impact of this positive performance of SMEs is expected to reflect in many ways-more jobs, more full-time staff and part-time positions becoming full time. Nearly 20 per cent of SMEs are planning to increase wages and salaries in the coming 12 months.

The survey also noted that Christchurch housed the highest number of SMEs, with 51 per cent of them showing revenue rise in the past 12 months. From other parts of New Zealand, 35 per cent or more SMEs reported better revenue growth. Wellington SMEs posted 28 per cent hike in revenue.

Government Support

Many business analysts credit the Government for the support it extended to SMEs in achieving growth. There are successful models as in the UK, where the Government supported the SMEs with millions of pounds via the peer-to-peer lending scheme.

Neil Roberts, who is the CEO of SME consultancy Harmoney appreciated the government's new regulatory framework for licenced peer-to-peer lending, after passing the Financial Markets Conduct Act last year. Commerce Minister Craig Foss had commented that the introduction of peer-to-peer lending is part of the Government's Business Growth Agenda to build New Zealand's capital markets and achieve higher business growth.

SME Research Hub

The Small business ministry headed by Steven Joyce also introduced some novel initiatives to support the sector. Establishing the SME Research Hub in Wellington is an example of New Zealand's thrust on SMEs. The government has identified infrastructure, exports, innovation, capital markets, skilled manpower and natural resources as the core areas where SMEs have to pay special interest to be successful.