Small Business – The engine room of the economy


The Northland and NZ economy is primarily made up of Small Medium sized businesses.

As of February 2006
96% of enterprises employed 19 or fewer people.
87% of enterprises employed 5 or fewer people.
64% of enterprises had no employees.
The number of SMEs increased 4% in the year to 2006.
SMEs accounted for 30% of all employees.
Firms with 5 or fewer employees accounted for 11% of all employees.
From 2001 to 2006, SMEs accounted for 59% of all new net jobs in the economy.
There were 11,751 net new entries into the Business Demography dataset at February 2006.
Self-employed people accounted for 11% of people in the labour force (at March 2007).
Since 2003 the Small business advisory group has been providing a small business voice to the policy makers in Wellington. Last week the Small business Advisory Group made 16 further recommendations to the Government on behalf of Small Businesses.

Recommendations included

Making the business environment in NZ competitive to Australia’s with comparative benchmarks formulated and published to keep score.
Three recommendations on simplifying, removing obstacles and tax concessions for hiring and training Employees
Tax changes like abolishing FBT and increasing deductibility for childcare to encourage people into the workforce.
Other recommendations including resource management changes, the provision of credible business advice and export assistance

The panel for the Small Business Advisory is made of up small business owners from around New Zealand.

The Small business advisory group recommendation and report are freely available on the Ministry of Economic Development Website at www.med.govt.nz

Unfortunately there is currently no representation from Northland.

Do you have any recommendations for the Government? How could the environment we operate in be better served for businesses? The Northland Chamber of Commerce is always keen to hear from Small businesses on their concerns. We represent business at local and central government level to ensure that the business community is well served.

Have a look at the report and let us know your concerns

The Northland Chamber of Commerce is the networking, education, advocacy and marketing group for Northland business, and is part of a nationwide network of 30 and a world-wide movement of 21,000 chambers. Subscription to the free fortnightly chamber e-news can be arranged on info@northchamber.co.nz. Enquiries to 09-4384771 or www.northchamber.co.nz, www.kaiparachamber.co.nz and www.farnorthchamber.co.nz
You can have a say on this by going to the Northland Chamber of Commerce Feedback website on www.northchamber.blogspot.com

Northland business outlook weakens

The latest Northland Chamber of Commerce business opinion survey points to a general deterioration in a number of important performance indicators in Northland and the Northern Region of NZ.

The Chamber’s quarterly survey provides an important snapshot of where small and medium northern region businesses think they are headed as 85% of the 500 surveyed employ 20 or fewer staff.

Northland Chamber of Commerce chief executive Jeff Smith says businesses are significantly more pessimistic than they were in December. “This has to be of concern when the Northern region (Waikato - Northland) generates more than a third of New Zealand’s productive economic activity, and small and medium businesses provide most of the engine’s cylinders.”

Mr Smith says a “stand out” survey finding was that locally in Northland 48% of the survey respondents expect the general business situation in New Zealand will deteriorate in the next six months. This is more than an 80% increase on those who thought so in December, and three times as many who were pessimistic a year ago.

In other findings, more businesses expect:

softer demand for staff over the next three months;
to make less investment in buildings and machinery over the next year;
that significantly higher costs will squeeze profitability over the next three months;
significantly less demand from New Zealand customers over the next quarter;
That interest rates will rise further over the next year.


Mr Smith says 70% of respondents now expect interest rates to rise during the next year, up from 46% in the December survey. “Coupled with this is the suggestion that mortgage rates will go still higher, despite the Reserve Bank not lifting the official cash rate. With many small businesses using borrowings secured against mortgages this will obviously have an impact.”

Mr Smith adds, “The ability of business to absorb further price increases appears to be over if, as the survey suggests, demand and turnover are headed south. Perhaps rather than pushing huge State driven capital projects it may be time to invest in the “business engine” (the Golden Goose for the last 8 years).
If not, whichever party wins the Treasury benches risks inheriting an economy in danger of turning ice cold.

Jeff Smith
CEO – Northland Chamber of Commerce

The Northland Chamber of Commerce is the networking, education, advocacy and marketing group for Northland business, and is part of a nationwide network of 30 and a world-wide movement of 21,000 chambers. Subscription to the free fortnightly chamber e-news can be arranged on info@northchamber.co.nz. Enquiries to 09-4384771 or www.northchamber.co.nz, www.kaiparachamber.co.nz and www.farnorthchamber.co.nz
You can have a say on this by going to the Northland Chamber of Commerce Feedback website on www.northchamber.blogspot.com