The latest tranche of Prospa’s third-party research with Clarity Insights were covered by the New Zealand Herald, highlighting how 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 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 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 could absorb higher contribution costs without affecting hiring, pay increases, or employee hours.
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.”
“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.”
