Rising fuel costs impacting more businesses

· Fuel prices seen as greatest pressure on small business operators
· Fifty-seven per cent expect fuel costs to put pressure on their operation over the next 12 months, with one-in-five citing “extreme” pressure

As the Government examines the pricing practices of New Zealand’s major fuel suppliers, leading accounting software provider MYOB is highlighting the impact that rising fuel costs are having on the wider economy.

According to the latest MYOB Business Monitor Survey, 57 per cent of small to medium sized enterprises expect fuel prices to put pressure on their operations over the next 12 months, with one-in-five business owners anticipating facing extreme pressure. 

“The Government’s fuel market study is extremely concerning, given the impact of high fuel costs have on business. We hope every effort will be made to ensure there is a workably competitive market for fuel,” says MYOB Head of Small Business Ingrid Cronin-Knight.

“Our Business Monitor data from 2015 to 2017 shows increasing numbers of businesses feeling the pinch of higher fuel costs. The number of businesses predicting significant pressure from this has grown progressively since 2015.”

Three years ago, only 12 per cent of businesses reported feeling extreme pressure from fuel prices. This grew to 14 per cent in 2016, and it has now increased to 19 per cent. 

Number of businesses feeling “extreme” pressure from rising costs

Ms Cronin-Knight says reducing expenditure on fuel is not an option for many SMEs.

“High-priced petrol and diesel is an issue for the whole economy., especially small business operators who rely on fuel to run their operations every day. High fuel costs for them mean higher prices for everyone.

“Rising costs for small businesses have the potential to hurt the wider New Zealand economy, given SMEs are a key driver of growth and employment.”

She says the Government’s fuel market study confirms concerns in the business community about the market for fuel, and urges business operators to plan for plan for increasing costs.

“Fuel is one of those living expenses we can’t avoid, and in the current economy, these expenses change regularly and often without warning.

“They should also be ready for this to affect their consumers. A combination of oscillating fuel prices and increases to other living costs can have a big impact on the amount of discretionary spending available for local households.

“SMEs need to take simple strategic measures to prepare for any changes. Some simple scenario planning that allows owners to look at how increasing costs can affect their operations, would be valuable.

“Using online accounting tools can help with financial management, and your accountant can assist with benchmarking and strategic planning,” says Ms Cronin-Knight.

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For further comment or other information please contact:

Conor Roberts, MYOB NZ Communications and Public Affairs Manager
M: 021 124 6004 / E: conor.roberts@myob.com

Gerard Blank, The Agency Communications Limited Director
P: 03 341 5841 / M: 0275 243 629 / E: gerard@theagencynz.co.nz

About MYOB
MYOB (ASX: MYO) is a leading cloud based business management solutions provider. It makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and in 2015 was awarded the BRW award for the most innovative large company for 500+ employees and placed 2nd in BRW’s Most Innovative Companies Award list across all categories nationally.  For more information, visit myob.co.nz or follow @MYOB on Twitter.

About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran in February/March 2017. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.