New Zealand SMEs Boosting Job Growth

Small businesses employing just a third of New Zealand’s workforce have delivered more than two-thirds of the nations’ jobs growth over the past year, a leading economist says.

Former Australia and New Zealand Bank chief economist Cameron Bagrie, who now heads Bagrie Economics, said Monday that small business employment rose at an annual pace of 8-10% in the past 12 months, outpacing the 3.1% growth in new jobs nationwide, Scoop reported.

 “It looks to me like already small to medium size enterprises are accounting for about two-thirds of the employment growth across New Zealand,” Bagrie said.

He was speaking at the launch of a new SME data tool by accounting software developer Xero, leveraging its 300,000 domestic SME subscribers, whose information populates its system. Bagrie was engaged to interpret the data.

New Zealand’s SMEs employ about a third of the nation’s 2.62 million-strong labor force while accounting for about a quarter of economic activity.

Small Business Minister Stuart Nash welcomed the new Xero tool, which provides real-time information, saying the data will make it easier to develop policy supporting what he described as “the backbone of the economy”. SMEs “provide opportunities for entrepreneurship, productivity, and employment,” he said.

Xero’s ‘Small Business Insights’ provides a snapshot of New Zealand’s small business sector, covering cash flow, job creation, getting paid and overseas trading. That data showcases areas of concern and strength for SMEs. On the flipside, SMEs are underrepresented in Japan, the world’s third-biggest economy, and haven’t managed to crack that market yet, he said. “These are the exciting dynamics on how we can use this data to make more informed choices or policy-based decisions,” Bagrie said.

Another major issue for small business was cash flow, with data showing more than 56% of SMEs were cash flow positive in March, recovering from a low of about 39% in January.