Stats NZ has a new website.

For new releases go to

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: 2010
Embargoed until 10:45am  –  08 April 2011

Business Operations Survey

The Business Operations Survey (BOS) collects information from a cross-section of New Zealand businesses. The survey aims to build a better understanding of a range of business practices and behaviours that may have some impact on business performance. It covers businesses that have six or more employees, and have been operating for one year or more. 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 price and wage setting, and recent financing arrangements for 2010. The yearly structure of the survey is shown in the table below.

Business Operations Survey yearly structure

2005 2006 2007 2008 2009 2010
Module A Business performance Business performance Business performance Business performance Business performance Business performance
Module B Innovation ICT Innovation ICT Innovation ICT
Module C Business practices Employment practices International engagement Business strategy and skills Business practices Price and wage setting
Module D N/A





Financial conditions
Note: ICT – Information and communications technology; N/A – Not applicable


The BOS survey provides a rare source of nationwide information on how businesses respond to their changing environment.

This is the first release of business operations statistics covering the financial year at August 2010. It is accompanied by Business Operations Survey: 2010 – Detailed tables, which are available on our website,

Business operations

Reported business performance

Changes in reported business performance reflect businesses’ views on how their internal and external business environments have changed over the period (last financial year at August 2010) following the economic downturn. These perceptions were similar to those reported in 2009, but show a decrease across all measures compared with 2007 and 2008.

There are a range of measures that can be used to indicate business performance. These performance indicators may be influenced by many factors, both internal and external to the business. The performance indicators measured in the survey include sales, profitability, productivity, and market share.

Businesses were asked about their performance over the last financial year to August 2010.

Of businesses surveyed in 2010: 

  • 36 percent reported an increase in total sales of goods and services, down from 41 percent of businesses in 2009, and a drop of around 20 percentage points from the years 2007 and 2008
  • 32 percent reported an increase in profitability, similar to the proportion of businesses in 2009, but down on previous years
  • 32 percent reported an increase in productivity, similar to the proportion of businesses in 2009, but down on previous years
  • 20 percent reported an increase in their market share, similar to the proportion of businesses in 2009 but down on previous years
  • the proportion of businesses reporting no change in these indicators remained similar.

 Graph, Reported businesses performance, last financial year at August 2007–10.

Business activities

The BOS collects information on activities businesses may be involved in, such as export sales, investment in expansion, research and development (R&D), and tourism sales. Participation in all of these activities in 2010 was similar to 2009. This indicates that even in times of difficulty, businesses still maintained similar levels of operations.

 Graph, Business activities, last financial year at August 2007–10.

Of businesses surveyed in 2010:

  • 15 percent gained sales from exports
  • 25 percent invested in expansion; however, the survey did not collect information on the value of this investment
  • 20 percent gained sales from tourism
  • 7 percent undertook R&D.

It should be noted that results on R&D from the BOS differ slightly from those from the Research and Development Survey because of differences in sample selection, target population, and reporting periods.

Business activities
Last financial year at August, 2007–10

  2007 2008 2009 2010
Export sales 16 15 18 15
Investment in expansion 22  22 26 25
Research and development 7 7 8 7
Tourism sales 18 18 19 20
Requested debt finance  29 29 28  27
Requested equity finance 11 13 11 12

1. For more information on the businesses included, see 'Technical notes' in this release. Percentages are of all New Zealand businesses.
Note: All counts in this survey were randomly rounded to base 3 to protect confidentiality, so actual figures may differ from those stated.

Information and communications technology (ICT)

Internet connection types

The levels of computer and Internet use are reaching saturation levels, so there is little change in the number of businesses using these. However, the most evident changes can be seen in the types of technology being used. Businesses are moving away from fixed connection types to more mobile ones.

Computer and Internet use can help businesses in many ways. In 2010, business use of computers and the Internet was high over all size groups and industries.

Ninety-three percent of businesses used broadband connections in 2010, compared with 89 percent in 2008. The most common type of broadband connection used was DSL (digital subscriber line), used by 79 percent of all broadband users in 2010, similar to the level in 2008 (82 percent). This data is similar to that from Statistics NZ's Internet Service Provider Survey: June 2010, which shows that broadband connections are now more common than dial-up.

Cellular Internet connections increased from 11 percent of all broadband users in 2008 to 25 percent in 2010.

 Graph, Broadband access by industry, last financial year at August 2008 and 2010.

Levels of broadband connections were high across all industries, except in the agriculture, forestry, and fishing industry where only 79 percent of businesses use broadband. This proportion is lower than all other industries.

Internet activities

The Internet may be used for a number of different business-related purposes. Of all businesses surveyed in 2010, 89 percent used the Internet for financial activities (eg online banking, invoicing, or making payments), the most common purpose. This proportion rose from 85 percent in 2008. Sharing information within the business was the next most common purpose (43 percent), followed by internal or external recruitment (42 percent).

Internet activities varied over the different industry groups. Sixty-six percent of businesses in the education and training industry used the Internet for recruitment,  while only 26 percent of agriculture, forestry, and fishing businesses used the Internet for the same purpose.

All Internet activities showed slight increases as more businesses use the Internet. This was particularly evident in the arts and recreation industry.

Internet sales

Overall, 51 percent of businesses used the Internet to receive orders for goods or services, up from 40 percent in 2008. Of those with Internet sales, most indicated that these sales represented less than one-tenth of their total dollar sales.

The rise in the number of businesses using the Internet to receive orders indicates that the web is a useful channel for businesses to promote their products. However, the ability for customers to make online purchases does not necessarily mean they will always buy online. Of businesses surveyed, 9 percent indicated Internet sales accounted for zero percent sales. Results were similar across all size and industry groups.

Price and wage setting

The statistics from this module of the survey show new information not previously collected. It provides detail on the price and wage setting practices of New Zealand businesses which will allow comparison with other similar international statistics.

Changes that may affect pricing

There are many factors that influence a business' decision to increase or decrease the price of their main product. In 2010, the BOS asked businesses how changes to certain factors influence their decisions for increases only, decreases only, or both increases and decreases:

  • The primary influences on price increases only are changes in labour costs and changes in other costs (eg purchase of goods from suppliers, rent). Over one-third of businesses stated these reasons for influencing their price increases.
  • Price decreases only are primarily influenced by changes in demand and competitors' prices, with 7 percent of businesses stating these as reasons for influencing their price decreases.
  • Changes in demand and competitors' prices were also the primary influences for both price increases or decreases, with over 40 percent of businesses stating this.

 Graph, Changes that may affect pricing, last financial year at August 2010.

These results are very similar to those collected in a Bank of England survey of businesses in the United Kingdom (New insights on price-setting behaviour in the United Kingdom). In this survey, most businesses reported labour costs were important for price increases, and competitors' prices were important for price decreases. The results of this survey are available from the Bank of England website

Changes in pricing practices

Businesses' pricing practices can change over time, due to changes in the business environment and customers. In 2010, businesses were asked how their pricing practices changed over the last two years:

  • 32 percent reported a decrease in profit margins
  • 32 percent reported that sensitivity of customers to price changes had increased.

This may suggest that businesses are prepared to reduce profit margins in order to retain customers.

 Graph, Changes to pricing practices and pricing-related matters in the last two years, last financial year at August 2010.

Impacts of legislative changes

Effect of GST increase 

On 1 October 2010, GST rose from 12.5 percent to 15 percent. In 2010, businesses were asked how this increase affected their price reviews and salary negotiations:

  • 34 percent reported they had conducted (or were in the process of conducting) a price review specifically because of the GST increase
  • 5 percent reported the rise was a factor in wage and salary negotiations
  • 17 percent reported they have not conducted price reviews specifically because of the GST rise, but plan to
  • 30 percent reported that the change in GST has not been, but was likely to be, a factor in future wage negotiations.

Results varied across the different industries, due to the different nature of the goods and services provided. The biggest impact on prices was in the accommodation, and food services industry, followed by the retail trade industry. For both these industries, over 60 percent of businesses had reviewed prices due to the GST rise. At the other end of the scale, only 9 percent of businesses in the mining industry did so.

For more detailed information see the Business Operations Survey: 2010 – Detailed tables, available from the Statistics NZ website

Wage increases as a result of increase in the minimum wage

On 1 April 2010, the minimum wage rose from $12.50 to $12.75. Some businesses paid staff at the minimum wage, so were affected by this change. Some businesses paid staff above the minimum wage, so were not affected to the same extent.

Of all businesses surveyed in 2010:

  • 60 percent reported the increase in minimum wage did not cause an increase in wages
  • 31 percent reported the increase in minimum wage caused an increase in wages for employees paid at this level
  • 13 percent reported the increase in minimum wage caused an increase in wages for employees who are paid a set amount above the minimum wage.

There are differences across the range of industries due to the different mixes of employees paid at or above the minimum wage. Twenty-five percent of businesses in the accommodation and food services industry did not increase wages due to the increase in minimum wage. This compared with 88 percent in the professional, scientific, and technical services industry.

Factors for determining entry wage

Businesses may consider a lot of factors when determining the entry wage for employees. These factors include minimum wage rates, collective pay agreements, wages or salaries of similar employees, and labour availability. These factors will affect different kinds of businesses differently, depending on how they operate their business.

The most common factor that businesses considered when determining entry wage levels was the wages or salaries of similar employees within the businesses (51 percent of all business). This was followed by wages and salaries of similar employees outside the business (19 percent) and minimum wage rates (16 percent).

Rates varied across industries. The mix of skills needed and the demand for those skills in the workforce plus other factors such as the working environment, can have varying influences on the entry wage for businesses in different industries. 

There are also differences across industries for those reporting that minimum wages were a factor in determining entry wage levels. Once again, this is due to the availability of labour and the mix of skills needed in certain industries. For example, table 9 shows the accommodation and food services industry had the largest proportion of businesses (43 percent) that reported minimum wage rates as a factor for determining entry wage levels. In contrast, table 8 shows this industry also had the highest proportion of businesses that reported they increased wages due to the increase in minimum wage (63 percent). For more details, see table 8 in the downloads section.

 Graph, Factors for determining entry wages, last financial year at August 2010.

The Business Operations Survey: 2010 – Detailed tables  are available with this information release and can be downloaded from the Statistics NZ website

For technical information contact:
Kathy Jackson
Wellington 04 931 4600

Next release ...

Business Operations Survey: 2011 information release will be published in April 2012.

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