Covid 19 coronavirus: Small firms’ export plans undeterred by pandemic: survey
Small and medium-sized businesses are pushing on with export plans despite the pandemic, a survey out today finds.
New research from MYOB shows just 6 per cent of small firms have had their plans for export stalled due to Covid-19. Of 175 export businesses included in a recent survey, just 17 per cent said the pandemic had stalled their export plans this year.
Almost 30 per cent of businesses said they would continue with their export plans as normal, while 13 per cent said they planned to review their export volumes in 2021.
MYOB’s latest Business Monitor survey of 1000 New Zealand small and medium-sized business owners, firms with less than 20 employees, found there was a sentiment of “cautious optimism” among SMEs.
Just over 40 per cent of businesses surveyed said they expected their revenues to stay the same in the next 12 months, while 27 per cent expected a slight increase to revenue. More than a quarter anticipated an increase.
Profitability was found to be down for 36 per cent of SMEs between December and February, and 27 per cent expected it to decline further in the next three months.
Krissy Sadler-Bridge, MYOB SME senior sales manager, said the latest Business Monitor results showed a turnaround from more pessimistic findings in last year’s survey, when 40 per cent of operators expected their revenue to be down in 12 months’ time.
She said it was encouraging that firms were continuing with their export plans despite ongoing disruption caused by the pandemic offshore.
“We probably would have expected to see a far higher number [of firms delaying or cancelling export plans],” Sadler-Bridge told the Herald.
“It’s pleasing to see that businesses, even with the constraints of what they would have felt domestically after the last 12 months, on top of what is happening worldwide and still significant disruption, that actually there is optimism from businesses, that they have plans from an exporting perspective that they still are proceeding with.”
Sadler-Bridge said the level of optimism among small firms was somewhat surprising given the level of uncertainty and cost pressures they continued to face.
“It is interesting to see that there is this optimism come because there is still so much going on that has the ability to impact profitability. Recently, some of the inflationary pressures have already been impacting our SME audiences … disruptions around supply chain in regards to getting goods into the country quick enough, and that’s had an impact in terms of margin squeezes and I think those SMEs are now potentially thinking that they will have to push that extra cost that they are starting to see onto their customers.”
SMEs based in Auckland have seen the most significant impact on their bottom line in the year to March 2021, with 44 per cent of operators reporting a fall in revenue.
By comparison, businesses based in Christchurch fared better than the national average, with 35 per cent reporting reduced revenue over this time, while 48 per cent of Wellington-based SMEs said their revenue had remained the same and 38 per cent experienced a fall.
Looking ahead to the next quarter, a third of firms said they have booked less work or sales in pipeline for the quarter, while 40 per cent anticipated the same workload.
Just over 31 per cent of Christchurch firms said they had more work lined up in the quarter, compared to 29 per cent of firms in Wellington and 20 per cent based in Auckland.
One-in-10 firms said they intended to decrease the number of full-time employees in their business in the year ahead, while 12 per cent plan to cut their number of contract staff over the next 12 months.
A further 8 per cent of SMEs said they intended to increase both full-time and contract staff.
“While our insights have shown that there are green shoots for some SMEs when it comes to profitability, pipeline and revenue, with some pressures and concerns still looming large – in what is still a fragile operating environment – I’d encourage consumers to continue to focus on supporting local business however they can,” said Sadler-Bridge.
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