Stats NZ has a new website.

For new releases go to

www.stats.govt.nz

As we transition to our new site, you'll still find some Stats NZ information here on this archive site.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Business Operations Survey: 2009
Embargoed until 10:45am  –  23 April 2010
Commentary

Business Operations Survey

The Business Operations Survey collects information from a wide cross-section of New Zealand businesses with more than six employees, in order to build a better understanding of a range of business practices and behaviours that may have some impact on business performance. The information is collected through a modular survey that contains a repeating business operations module, an alternating information and communications technology (ICT) or innovation module, and a contracted module that focused on business practices and recent financing arrangements for 2009.

This is the first release of business operations statistics covering the financial year ending August 2009. A full set of tables from the survey will be released on 30 April 2010. A detailed report on innovation in New Zealand will be published in June 2010.

Reported business performance

There are a range of indicators that can be used to indicate business performance, and these may be influenced by many factors, both internal and external to the business. In the survey, businesses were asked to assess their performance based on sales, profitability, productivity, and market share indicators.

 Graph, Reported business performance, last financial year at August 2008 and 2009.  

Businesses were asked about how they saw their performance change over the last financial year, at August 2009:

  • 41 percent reported total sales of goods and services had increased over the last financial year, compared with 57 percent of businesses in 2008
  • 31 percent reported an increase in profitability over the last financial year, compared with 42 percent in 2008
  • 30 percent reported an increase in productivity over the last financial year, compared with 38  percent in 2008
  • 21 percent reported an increase in their market share over the last financial year, compared with 26 percent in 2008
  • the proportion of businesses reporting no change in these indicators remained similar.

These results reflect businesses’ views on how both their internal and external business environments have changed over this period of economic downturn (or negative GDP). Between June 2008 and June 2009, GDP had decreased 1.8 percent (see Gross Domestic Product: June 2009 quarter).

Finance availability

Businesses can request different types of new or additional finance in order to support either current operations or expansion. Twenty-nine percent of businesses requested new or additional finance in the financial year ending August 2009, a similar proportion to that reported in 2008.

 Graph, Finance availability, last financial year at August 2008 and 2009.

In 2009, fewer businesses reported the finance they sought was available on acceptable terms.

Eighty-three percent of businesses who requested debt finance reported that this was available on acceptable terms, a decrease from 89 percent in 2008.

Seventy-one percent of businesses who requested equity finance reported that this was available on acceptable terms, a decrease from 78 percent in 2008.

Change of existing credit facilities

Change in credit facilities is one factor that made finance conditions less acceptable to businesses. The survey asked  about three types of these facilities: overdraft or credit limits, interest rates or fees, and security or collateral requirements:

  • 69 percent reported that overdraft or credit limits remained the same.
  • 49 percent reported that interest rates or fees had stayed the same.
  • 83 percent reported that security or collateral requirements stayed the same.

Effects of not receiving debt finance

Businesses can request debt finance from many different sources, but sometimes may not be able to receive all of the finance they requested.  In 2009, 42 percent of businesses said the greatest effect of not receiving the full amount of debt finance requested was not being able to pay all their bills. This was followed by reducing work hours (39 percent), and laying off staff (38 percent).

 Graph, Effect of not receiving debt finance, last two financial years at August 2009.

Business activities

The Business Operations Survey collects information on a range of activities businesses may be involved in, such as export sales, investment in expansion, research and development (R&D), and tourism sales.  In 2009, the rates of participation in all of these activities were similar to those in 2008.

In 2009, 18 percent of businesses gained sales from exports. The industry with the highest proportion of exporting businesses was wholesale trade (42 percent).

Twenty-six percent of businesses invested in expansion.  A steady increase in levels of expansion was found to be proportional to business size. In 2009, 23 percent of small businesses (6 –19 employees) invested in expansion, compared with 45 percent of large businesses (100 or more employees).  The survey did not collect information on the value of these investments.

Eight percent of businesses undertook R&D, an activity that also increases with business size.  Six percent of small businesses performed R&D in 2009, compared with 20 percent of large businesses.

Nineteen percent of businesses gained sales from tourism.  Because there are many industries involved in tourism, there is no evident pattern of increased tourism activity as firm size increases.

 Graph, Business activities by firm size, last financial year at August 2009.

Innovation

Innovation is internationally recognised as a link to economic growth and productivity gains (OECD Innovation Strategy, available from www.oecd.org) and is therefore deemed an important statistic to be collected from businesses. Innovation includes the development or introduction of any new or significantly improved activity for a business.

Survey results indicate that 46 percent of businesses engaged in innovation activity over the past two years, which was the same rate as in 2007 when this information was previously collected.  The industry with the highest overall innovation rate was information, media, and telecommunications, at 60 percent. The larger the business size (number of employees), the more likely they were to innovate, which is the same trend seen in 2007.

 Graph, Innovation rate by industry, last two financial years at August 2009.

The overall innovation rate is made up of four categories, although an individual business can engage in more than one. Results showed that businesses undertook innovation in:

  • goods or services (26 percent)
  • operational processes (23 percent)
  • organisational or managerial processes (26 percent)
  • marketing methods (25 percent).

Results were evenly spread across the different types of innovation, similar to that in 2007. Innovation has a range of benefits for businesses, which still makes it worthwhile for them to continue to engage in innovation in spite of tougher economic conditions.

Reasons for innovating

There are many reasons why a business may choose to innovate. In 2009, 90 percent of businesses cited they wanted to increase their revenue as a reason for innovation. This was followed by wanting to increase productivity (78 percent) and to increase responsiveness to customers (73 percent). Similar patterns were evident in the 2007 data.

 Graph, Reasons for innovating, last two financial years at August 2007 and 2009.

Sales from product innovations

Over half of businesses who engaged in product innovation received 1 to 10 percent of their overall sales from these new products.

Further detailed results on innovation activities will be published on 30 April.

Performance assessment

Businesses focus on many different measures when assessing their performance. In 2009, 66 percent of businesses reported they focused a great deal on financial measures.  This was followed by cost measures (53 percent) and quality measures (41 percent).

Innovation was most reported as not being considered at all when assessing performance (20 percent). The majority of innovating businesses reported that innovation was undertaken to improve financial measures. It is those financial measures that businesses focus on when assessing their performance, rather than innovation itself.

 Graph, Assessment of performance, last financial year at August 2009.

Business practices

There are many different activities that businesses can perform in order to improve their business. More than three-quarters of all New Zealand businesses have processes to manage health and safety, a system for storing and retrieval of information, set procedures for customer complaints, and participation in training. Only 36 percent of businesses used personal assets as collateral for financing and 20 percent had quality management certification.

 Graph, Common practices to improve business, last financial year at August 2009.

For technical information contact:
Kathy Jackson
Wellington 04 931 4600
Email: info@stats.govt.nz

Next release ...

Business Operations Survey: 2009 tables will be released on 30 April 2010.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Top
  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+