Now in its 16th year, the annual survey of 1,000+ SME owners and operators from across the country shows 46% of SMEs expect the economy to improve over the next 12 months, while 32% are forecasting a decline and just over one-in-five (21%) believe economic conditions will remain the same. This marks a significant turnaround from the same time last year, when 40% expected the economy to decline and 37% believed conditions would improve.
This lift in confidence is also being reinforced by steady improvements in business performance over the last year. Twenty-eight percent of local SMEs report seeing revenue increase over the past 12 months – a slight rise on 2024 (25%), and 43% say revenue has stayed the same. The proportion of those reporting a decline in revenue has also fallen slightly from a third (33%) in 2024 to 29% in this year’s Business Monitor.
Particularly strong performances by sector saw 41% of agribusinesses, 35% of transport and logistics businesses, and 32% of respondents from the manufacturing and wholesale sector reporting increased year-on-year revenue.
Looking ahead to 12 months’ time and in step with more optimistic economic expectations, almost twice as many SME operators are expecting their income to have increased on current levels (35%) compared to those expecting revenue to be down (18%).
MYOB Chief Executive, Paul Robson, explains that SME owners are ready for a positive change of pace as the economy moves in the right direction after several challenging years.
“Demonstrating unquestionable resilience, business owners at the helm of New Zealand’s SMEs have done a remarkable job steering their organisations through an incredibly testing time. As the economy starts to show some signs of recovery, it’s encouraging to see more businesses reporting growth and likewise feeling more stable when it comes to their overall financial position. For many businesses, the turnaround we’re beginning to see and the reprieve from falling interest rates and lower inflation, can’t come soon enough,” he says.
“Based on the sentiment coming through in this year’s Business Monitor, it’s clear local SMEs are ready to build on the gradual improvements of the last year and accelerate this positive momentum. Key to this though, will be a focus on business fundamentals – like cashflow, stock management and profitability – balanced with seizing opportunities to innovate their operations to improve productivity and boost sales, as conditions improve.”
Positive outlook clouded by rising costs
Despite growing optimism, a number of concerns currently troubling business owners continue to impact sentiment around the year ahead, with the ongoing threat of inflation (63%), consumer confidence and spending (46%), and the rising costs of utilities (42%) being top of the list. Asked specifically about the latter, one-in-five SME operators say they are ‘very concerned’ about rising energy prices and their impact on their business this year.
Concern around the threat of higher costs and their potential effect on sales comes as little surprise as SMEs continue to feel the pinch from inflation rises to date, with those surveyed reporting their overhead costs have increased by an average of around $1600 per month over the last year.
Adding further weight are the costs of meeting their compliance obligations, with business owners estimating their regulatory and compliance costs have gone up by an average of more than $1100 in the last year.
Role of SMEs in Government’s growth agenda
As the Government moves forward with its focus on powering economic growth, SMEs – which account for 97% of all local enterprises in New Zealand – are clear on the initiatives and policy settings they believe would help them succeed.
Considering both their challenges and their business needs, topping the announcements SME decision-makers most want to see in Budget 2025 is reduced compliance and red tape (45%), followed by reducing the company tax rate to 25% (44%), and increased investment in skills and training programmes (29%).
Balancing costs with the need for more capital to help fuel growth, the concept of changing the low asset write-off to become an instant asset write-off of up to $10,000 also proved popular, with more than a quarter of SMEs (28%) saying they’d like to see this in the Budget.
When it comes to which policies specific to business tax and compliance would be the most beneficial for SMEs, a reduction in ACC levies for small business was the top response – selected by more than half (54%) of those surveyed, followed by a reduction in the company tax rate (41%), and a permanent increase to the provisional tax threshold (29%).
“The confidence and performance of local SMEs has turned a corner, and looking ahead over the next couple of years, increasing revenue and growing their business are the top goals for local business owners. To help them realise those growth ambitions, we need an economy that is firing and an environment where Kiwi businesses can innovate, leverage a skilled workforce, and remain competitive without the burden and additional cost of unnecessary red tape,” Paul explains.
“Given the scale of the SME segment and their vital role in the economy - both in their contribution to GDP and the employment they offer in the regions they call home - we hope these businesses receive the support they deserve in this year’s Budget. It’s important their needs and potential are recognised and targeted as the Government makes its next moves in pursuit of its growth agenda.
“Ensuring that efforts to maximise business productivity and drive growth is spread across organisations of all sizes, right across the country, will be critical to paving the way for the New Zealand economy to succeed long-term,” he adds.
ENDS
For more information, please contact:
Rosie Miller
NZ PR Specialist
E: rosie.miller@myob.com
Survey Methodology:
Running since 2009, The Annual MYOB Business Monitor is a national survey of 1,000+ New Zealand business owners, managers and directors, from sole traders to medium-sized companies, representing the major industry sectors. The Monitor researches business performance and sentiment in areas such as the economy, cashflow, technology usage and the Government.
The 2025 MYOB Business Monitor survey was conducted by the Online Research Unit – a division of Kantar. The survey comprised a national sample of 1026 New Zealand business owners, manager and directors (operators) and was conducted from January 24th – March 3rd 2025. All data has been weighted by industry type, location and number of employees, which are in line with Statistics New Zealand (New Zealand Business Demography Statistics: At February 2024: ISSN 1174-1988). The margin of error for the total sample is +3.1%.