April 2022
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Tough conditions see SMEs seeking new government leadership
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*More than two thirds of local SMEs believe the economy will decline in the coming year *Dissatisfaction with Government performance sits at 60% *National’s Christopher Luxon leads preferred PM poll by 17 points “If we just look back over the past six months, SMEs have had to navigate a tough second half of 2021, worsening supply chain disruptions and inflationary pressures, and a new Covid-19 outbreak hampering operations and staffing abilities in the first few months of this year,” says Jo.
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“It was concerning when we saw the proportion of SMEs saying they expected the economy to decline reach 55% in October last year - up from 41% in March, but these latest confidence numbers are even more worrying.
Low economic confidence underpinned by revenue struggles, profitability declines, rising inflation, and the lingering impacts of the Covid-19 pandemic, is prompting more local SME owners and decision makers to seek a change in the country’s leadership, according to new data from the 2022 MYOB Business Monitor. The nationwide survey of over 1,000 SME owners and managers – running annually since 2009 – highlighted that confidence in the economy was approaching levels last seen during the first outbreak of the pandemic in March 2020, with large numbers of SMEs reporting falling revenue and slowing quarterly activity. More than two thirds (68%) of local SMEs believe the New Zealand economy will decline in the next 12 months. Over a quarter (29%) expect that decline to be significant, while in contrast just 16% of SMEs believe the economy will improve over the coming year. MYOB Head of Go-to Market, Jo Tozer, explains that the steep decline in SME confidence follows a perfect storm of conditions negatively affecting business operations.
“With the exception of when Covid-19 initially reached our shores and we entered the first nationwide lockdown in March 2020 – when 79% of businesses were expecting worsening economic conditions – this is one of the lowest levels of business confidence we’ve seen in the history of our Business Monitor survey.”
Government performance impacting confidence
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The drop in economic confidence also brings bad tidings for the Government too, with half of the SMEs surveyed attributing some of their falling confidence in our local economy to the country’s leadership.
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When asked which top local factors are having the biggest impact on their level of confidence, government leadership came in third with 50% of businesses citing this as a top factor, after the ongoing impacts of the Covid-19 pandemic (62%), and the rate of inflation (55%).
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Similar negative sentiment is also reflected by growing dissatisfaction amongst SMEs around the Government’s performance. Satisfaction has changed significantly over the past year, with the majority (60%) of SME owners and managers now saying they are dissatisfied with the Government’s performance over the last 12 continued on Page 19
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