NEW ZEALAND BUSINESS NEWS
Empowering Kiwi Businesses
Only 49 per cent of New Zealand business owners and leaders feel positive about their current overall performance, and just 52 per cent expect to feel positive in six months. That forward-looking figure is the lowest since accounting and advisory business BDO began running its Business Performance Index, which surveyed 528 business owners and leaders in September.
The survey measures how businesses view their own performance rather than the wider economy, and the gap between the two is the story. Business leaders remain more upbeat about the parts of the business they control, such as finances, pipelines and workflow, than about the conditions around them.
Only 34 per cent of respondents feel positive about economic and political factors, making them the survey’s biggest concerns. The approaching election is one source of uncertainty, alongside global economic pressures, fuel prices and supply-chain issues.
The result is a split reading of the same business. Owners report serving customers, managing busy workloads, and pursuing growth, but rising costs, tight margins, and cash flow pressures mean effort is not yet reaching the bottom line.
Profit expectations are the one measure moving in a better direction. About 35 per cent of businesses expect their net profit margins to rise over the next 12 months, up from 29 per cent in May, and another 46 per cent expect margins to stay about where they are. That leaves a minority expecting margins to fall, a modest improvement on the earlier survey.
Size makes a clear difference. Businesses with revenue above $5 million and 20 or more employees are faring significantly better: 61 per cent are positive about current performance and 66 per cent expect to be positive in six months, both well ahead of the survey average.
Larger businesses generally have stronger balance sheets and can afford advisers who help with forecasting, supply chains, and financial planning. Smaller businesses often lack those resources, which leaves them more exposed when costs rise and cash flow tightens.
For smaller operators, the practical effect is less room to absorb a bad quarter. Businesses without a cushion or an adviser to model scenarios tend to hold back on spending and hiring until the outlook clears.
Hiring intentions improved only slightly from an already very low base. A quarter of businesses plan to actively recruit over the next 12 months, up from 17 per cent in May, while 68 per cent expect their existing staffing levels to meet their needs.
That means most businesses don’t plan to add people. For jobseekers, the survey points to a market where openings remain limited, and employers are choosing to work their current teams harder rather than take on new staff.
The survey suggests confidence is being held back by factors outside a typical business’s control, while the measures owners can influence are holding up better. Profit expectations have improved since May, and mid-market businesses report solid optimism, but overall sentiment remains subdued.
With the election approaching and cost and supply pressures persisting, the survey points to a period in which many businesses will focus on managing workloads and margins rather than expanding. The gap between how businesses view their own operations and how they view the environment around them is likely to persist until those external pressures ease.
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