NZ business conditions outperforming the Aussies

Research by accounting software provider MYOB has shown that New Zealand?s small and medium enterprises (SMEs) are expected to outperform Australian SMEs across several key areas in 2014 – and that 2013 was a better year for the Kiwis, too.

According to the MYOB Business Monitor Trans-Tasman Special Report 2014, “the New Zealand SME economy, hit harder by the effects of the global financial crisis, has entered a period of strong confidence and growth” while in Australia “the slowdown in the mining boom plus lingering weakness in key sectors? performances has seen reduced confidence.”

MYOB?s CEO Tim Reed explains: “The effects of the Canterbury rebuild and growth in Auckland, combined with the rural sector?s performance, are underpinning what will likely be one of the most significant and sustained periods of growth in New Zealand?s history.

“In Australia, businesses are more optimistic about growth this year compared to 2013, but the opportunities are probably at least six to 12 months behind where New Zealand sits.”

It?s all about the money

Key to the expected Australian recovery is currency.

“With the dollar dropping in value, Australia is increasingly becoming an attractive market for online purchases from overseas and an appealing travel destination.”

The Kiwi dollar, on the other hand, is on an upward curve, with a recent HSBC report stating that it “may surpass parity against the Australian dollar for the first time in four decades”. Of course, the continuing might of the Kiwi dollar does create more challenges for exporters.

Outperforming

The MYOB report shows that New Zealand?s SME economy “far out-performed its trans-Tasman neighbour in 2013”.

In the 12 months to August 2013, the number of Aussie businesses that experienced declining revenue vastly outnumbered those in a happier place – 39% of Australian SME operators reported revenue falls, compared to 18% experiencing revenue increases, while New Zealand operators were much more positive, with 30% reporting revenue increases and 24% reporting a decline.