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SMEs business confidence 'holding up', says ANZ

Monday 8th October 2012

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Small sized business confidence and hiring intentions are "holding up" even as ongoing uncertainty continues over the global economic outlook, according to ANZ's Business Micro Scope survey.

Business sentiment across all New Zealand firms was relatively stable in the three months ended Sept. 30, although larger firms were more optimistic than the smallest. Sentiment across businesses with 20 or more employees, rose to 23.5 from 17.7 in the three months ended June 30, while small and medium sized businesses, with fewer than 20 staff eased to 11.6 from 11.8.

Hiring intentions kicked up across both groups, the first rise in 12 months, led by the manufacturing, construction and service sectors. Agriculture was the lowest ranked sector for the second successive quarter, falling to a three year low.

"In a difficult trading environment, it's encouraging to see that small business confidence has remained solid, and that some businesses are expecting to take on more staff," managing director at ANZ Business Banking, Fred Ohlsson, said in a statement. "New Zealand's 400,000-plus small businesses are the engine room of our economy. Even in difficult times, our smallest firms can help drive employment."

Low turnover was the biggest problem faced by both groups, at 25 percent, up from 22 percent in the previous quarter.

The rising exchange rate was of concern for all firms, up 2 percentage points to 10 percent in September.

Profit expectations for the smallest SMEs fell into negative territory for the first time slipping 8 points to -1.4. Large firms profit expectations edged up 1 percent to 20.2 percent.

"The micro business segment (up to 5 employees) reported an eighteen-month low in activity outlook, while small-sized firms (6-20 employees) registered a three-year low in activity outlook," the ANZ report says. "The combined measure across both segments also eased to its lowest level in three years but remains above the long-term average."

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