Newstalk ZB
Many businesses are running low on cash reserves as they grapple with surging fuel prices and KiwiSaver contributions. Polling of more than 500 small to medium enterprises by financial technology firm Prospa has found 17% of respondents had less than a month of cash reserves. While some had been trying to increase their buffer, only 23% had more than 10 months of reserves. The Prospa SME Sentiment Tracker survey, carried out in March, found 14% of businesses cited fuel as their biggest cost, up from just 5% of businesses a year earlier. Among businesses that make KiwiSaver employer contributions, 43% said they were not confident they can absorb higher contribution costs without affecting hiring, pay increases, or employee hours. Previous polling by MYOB has found more than a third of small to medium enterprises would look to raise prices to cover rising fuel costs. But Prospa New Zealand managing director Adrienne Begbie said many businesses wouldn’t or couldn’t pass on the cost increases and were looking at what they could do to absorb the costs instead. “It’s pretty hard out there. We’ve come out of a difficult time – of Covid and a recession – and now we’re hit with more issues.” Both business confidence and consumer confidence have both dropped in the past month, according to latest ANZ surveys. Credit rating agency Centrix recorded more liquidations in March than any March since 2015 and MBEI recorded more liquidations last year than any year since 2010. NZIER’s latest Quarterly Survey of Business Opinion – a key indicator tracked by the Reserve Bank – shows firms reported flat activity in the first three months of the year and many businesses cut or were looking to cut staff. Steel Worx director Chris Barrett told Ryan Bridge TODAY many businesses in the construction sector were having to compete more for work and were finding it hard to find capital. “It’s getting worse and worse. Most of the people I’m talking to are having their worst month, literally month after month at the moment. “We’re fighting for every job. My analogy is we’re seagulls on the beach fighting for every morsel.” Begbie said businesses were choosing pragmatism over panic, and were more optimistic about the long-term.Nearly three in 10 respondents to the Prospa survey said they were very confident about their outlook over the next five years. “We’ve seen it through Covid and coming out of Covid. They can adapt and have adapted, and the longer-term confidence signals resilience.” Michael Sergel is Newstalk ZB’s business reporter. He’s been covering business, politics, local government and consumer affairs for more than a decade.
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