In a nationwide survey of 500+ SME owners and decision-makers, 30% of those polled reported having more work lined up for January to March than they would usually expect, while 41% have the same level of work or sales in the pipeline as normal. However, just over a quarter (27%) say they have less work lined up for their first quarter, compared to expectations.
This follows a challenging end to 2024, with most (43%) local SMEs reporting lower sales than expected for the final quarter. In comparison, over a third (37%) said their sales were as expected, while just 18% of those surveyed said sales from the start of October to the end of December exceeded their expectations.
MYOB Chief Customer Officer - Dean Chadwick, says the positivity emerging in SMEs’ sales outlook is an encouraging start to 2025, despite lingering uncertainties around inflation and the international landscape.
“Inflation and the cost of living continue to influence SME confidence coming into 2025, as well as factors like transport costs, the country’s economic performance, and interest rates. Many will also be keeping a close eye on international markets with more change likely over the next 12 months,” explains Dean.
“However, reinvigorated demand for their goods and services as consumer confidence increases, will help to ease some of the pressures many business owners have been feeling over the past few years. While it’s certainly still early days, it’s heartening to see local SMEs are beginning the year with more momentum than many will have seen in some time.”
The prospect of new sales growth also increases with business size. Medium-sized businesses with 50-99 employees are seeing a particularly strong start to the year, with 57% of this group reporting they have more work or sales lined up for the first quarter of 2025 than expected, after 33% logged higher-than-forecast sales for October to December 2024.
SMEs plan business investment to fuel growth
As encouraging indicators of economic recovery materialise, SMEs are turning their attention to improving their operations for 2025.
Nearly a quarter (24%) of business operators surveyed plan to increase spend on improving their business operations this year, while half (50%) intend to keep their investment the same as previous years. However, just over one-in-five businesses are looking for cost savings, with 21% planning to reduce spend on improving their operations.
So where are SMEs targeting this investment? With a focus on growing demand and securing a steady flow of customers, a third (33%) plan to put most of their spend toward marketing and sales, followed by 28% looking to put most of this budget toward technology and digital transformation.
Rounding out the top five areas likely to see more investment from SMEs this year are equipment and machinery upgrades (25%), team training and development (24%), and improving the customer experience (19%).
“As local business owners look to stimulate growth this year, it’s all about the customer – driving foot traffic and attracting new custom by homing in on their marketing and sales activities. Then, it’s about doing what they can with their teams to keep these customers returning and improving the customer experience,” says Dean.
“Additionally, SMEs’ continued appetite to invest in technology and digital tools and likewise make technology a key element of their business strategy, will help them to maximise these potential gains.”
Prioritising innovation to pursue business goals
In addition to investing in improvements to their business operations, MYOB’s latest poll shows that SMEs recognise innovation as a key mechanism for advancing their business.
Half of those surveyed said that innovation is important to their business and more than a quarter (27%) of SMEs surveyed see innovation as a significant priority, with the median estimated spend on innovation for 2025 sitting at just over $33,000.
The data also highlights that this investment increases across different sectors. For those in the manufacturing, and construction and trades industries, the estimated median investment for 2025 reaches $74,000 and $63,330 respectively.
“In determining how much they’ll spend on innovation, we know local business operators are still carefully balancing lower demand volumes and higher costs, so it’s a delicate trade-off between managing those challenges and exploring innovation as a way to help boost their business performance,” explains Dean.
“If business owners bed down their investment plans now, they will be better positioned to start realising their ambitions – whether that is business expansion, revenue growth or upskilling their teams – when they enter the new financial year.”
ENDS
For more information, please contact:
Rosie Miller
NZ PR Specialist
E: rosie.miller@myob.com
About the research
MYOB’s survey of SMEs (with fieldwork conducted by Dynata) comprises a nationally representative sample of 538 owners and decision makers in small to medium-sized businesses in New Zealand. The survey was conducted between 8– 20 January 2025. Respondents were sampled randomly from the Dynata online panel and screened to ensure they met the qualifying criteria. Quotas were maintained on industry sector, business size/FTEs and region to ensure a reliable and diverse cross section of SME opinions were obtained.