New data shows 58% are changing how they manage cash, even as profit expectations improve
Six in 10 New Zealand SMEs are changing how they manage cash ahead of the 7 November general election, new Prospa research shows. This shift is taking place even as confidence in their own business prospects recovers.
The Prospa SME Sentiment Tracker, run by research firm Clarity Insight, found 58% of SMEs are managing cash differently over the next three months. Almost a quarter (24%) are delaying big purchases, such as vehicles or equipment upgrades, and 15% are holding off on expansion or hiring until the result is in.
Larger operators are the most affected. SMEs with 10 to 49 employees and more than $1 million in turnover tend to postpone purchases and build reserves, while sole operators are more likely to carry on as usual.
Election caution sharpens for bigger businesses
“A sole trader keeps working because the work is there. A business with ten or more staff and a vehicle upgrade on the books has a decision to make, and plenty of them have decided to wait,” said Adrienne Begbie, Prospa’s New Zealand managing director.
The wait could be lengthy. Advance voting opens on 26 October and preliminary results are released on election night. The Electoral Commission does not declare official results until 27 November.
The pause is not a sign of trouble, the research found. About 29% of SMEs now expect profit growth over the next year, up from 19% in March. Those unsure about the year ahead fell from 15% to 9%. Some 26% can cover four to six months of expenses, up from 20%.
“Confidence is genuinely coming back. But confidence and commitment are two different things, and right now a lot of businesses are choosing to wait,” Begbie said.
Other data shows a mixed picture. ANZ’s September Business Outlook put business confidence at +52, down from +53.7 in August and described the recovery as bumpy. The Reserve Bank of New Zealand lifted the official cash rate by 25 basis points to 2.75% on 2 September. Its next review is on 28 October.
Costs are a sticking point. Asked which single change from the next government would help most, 29% chose a lower tax bill. Twenty-four per cent preferred lower ongoing expenses such as fuel, power and insurance. If pressures eased, the most common first move (24%) would be to pay down debt or rebuild a cash buffer.
AI use rising as holdouts shrink
A second set of results from the same tracker shows the share of SMEs using no AI fell from 45% in March to 36% in August. In all, 59% use AI in some capacity, up from 50%.
For businesses not using AI, the top barriers are uncertainty about return on investment (34%) and not knowing which tools suit their needs (32%). Upfront cost ranks sixth (12%).
Government research points the same way. The Ministry of Business, Innovation and Employment (MBIE) study of 500 SMEs found 94% knew of at least one AI tool. The data also said that awareness was not the main barrier.
“The hold-outs are shrinking fast. What’s stopping the rest isn’t the price tag. It’s that nobody has shown them which tool actually solves a problem they have,” Begbie said. “When a third of the businesses still outside AI say they can’t see the return, that’s not skepticism. That’s a gap in the advice they’re getting.”
Prospa, which works with brokers, accountants and aggregators, surveyed 501 SME decision-makers between 21 August and 3 September. Respondents ran businesses with fewer than 50 full-time staff and under $20 million in annual revenue.
