The latest nationwide poll of more than 500 mid-market* business leaders and decision-makers reveals that more than three quarters (79%) of those surveyed expect the economy to improve over the next 12 months – the highest level of optimism in the last three years MYOB has polled this sector.
Adding to this positive outlook is a remarkably solid business performance, with 63% of mid-market respondents reporting that their business revenue is up on a year ago. Interestingly, this closely matches expectations seen this time last year, with 62% of those MYOB polled in late 2023 predicting revenue growth over 2024.
However, mid-sized businesses have not been left unscathed by recent economic challenges, with 26% reporting their revenue is about the same as a year ago, while just over one-in-ten (11%) say their revenue is down.
Looking ahead, optimism continues to hold strong as more than two-thirds (68%) of decision-makers expect their revenue to increase over the next 12 months, while 23% are more cautious, forecasting their revenue to remain steady.
Achieving any projections of sales growth is likely to be helped by robust sales pipelines, as a significant majority (83%) of mid-market business leaders report they have more work or sales scheduled for the final quarter of the calendar year, than they’d usually expect.
“Earlier this year, we saw the mid-market under pressure, with fuel prices, utility costs and cashflow levels all constraining business performance. While these cost pressures certainly haven’t gone away, it’s clear that sentiment has turned a corner and business leaders are ready to build on the gradual improvements we’re seeing across the economy, backed by some healthy sales pipelines,” says Kim Clarke, MYOB Executive General Manager – Enterprise & Practice.
“While many in the mid-market will be balancing their optimism with some caution over the coming months, it’s really encouraging to see that there is a healthy level of demand coming through from new customers. In fact, more than a third (34%) of the New Zealand businesses polled say that new customers account for over 60% of their expected sales for the last quarter of 2024.”
Growth the focus for businesses’ investment roadmaps
On top of an anticipated strong end to the year, the insights also reveal that local mid-sized enterprises are entering their next chapter with ambitious plans.
More than half (56%) of those polled highlighted business expansion, including increasing employee headcount or opening more sites, as one of their top goals for the next five years. Other ambitions include scaling up from a local to a national level (52%) and increasing their revenue (45%).
With growth as a core objective, MYOB’s survey also revealed that in the nearer term, many are serious about investing in innovation-led initiatives over the next 12 months.
The majority (42%) of respondents plan to spend between $60,000 to $80,000 over the year ahead on innovation in their business, while 27% intend to spend over $100,000 and 19% plan to invest between $80,000 and $100,000.
In terms of what this spend is likely to go toward, new product development (34%) tops the list, followed by advancing business’ engineering processes (33%), and scientific research and analysis (31%). Rounding out the top five, technology continues to be recognised by the mid-market as key to business success, with 27% allocating budget towards digital security and 23% to cloud computing.
Across the Tasman, Australian mid-market leaders highlighted similar areas for innovation investment, with new product development (31%) and digital security (30%) coming out on top. However, some differentiation appears with supply chain development (26%) and customer relationships (23%) also being a key focus.
“It’s evident that the determination, resilience and measured approach of mid-market businesses in navigating difficult conditions has paid off, with many now primed to take advantage of new opportunities as economic conditions start to improve,” says Kim.
“While business leaders will likely continue to take a considered approach to investment as cost pressures take time to soften further, it’s clear that investing in innovating their operations and customer propositions remain an integral part of their strategy to drive growth.
“By dedicating effort and resources in these areas, mid-market decision-makers should feel confident they are setting themselves up with a stable runway to achieve their bold five-year targets. This firm forward-focus will see this sector of businesses assert their position as the leading market force we know them to be.”
ENDS
*Businesses with between 20-500 FTEs and $5m+ annual revenue.
For more information, please contact:
Rosie Miller
NZ PR Specialist
About the research:
Research for MYOB’s Mid-Market survey was conducted by independent research agency, Dynata. A total of 513 mid-market business leaders and decision-makers in New Zealand (with between 20-500 FTEs and $5m+ annual revenue) took part in the survey. Respondents were sampled from the Dynata online business profile panel sources, and screened to ensure they met the qualifying criteria. Quotas were maintained on industry sector and business size/FTEs to ensure a reliable and diverse cross-section of mid-market business opinions were obtained. The survey was conducted between 6th – 30th September 2024.