Rural sector stabilises despite challenges

- Rural businesses show signs of improvement despite facing constrained business environment
- However, 1-in-5 rural businesses expecting no change from technology a “cause for concern”

As Fieldays 2017 kicks off, a new survey by accounting software provider MYOB reveals rural businesses are showing strong signs of economic improvement despite a constrained environment.

The MYOB Business Monitor survey shows that the prospect of improvements in international commodity markets and increases in schedule prices have injected a measure of confidence into the farming and rural sector.

MYOB General Manager Carolyn Luey says the growth and development of heartland New Zealand is vital to New Zealand’s economy.

“Our country’s success is built on our rural industries. The last few years have proven to be testing with a challenging international environment depressing farmgate incomes. However, we’re pleased to see our rural operators reporting solid economic improvements,” she said.

Economic prospectus looking positive

“Revenues are up from 12 months ago, and business operators are confident that this growth will extend into next year.”

“While managing increased debt levels, the sector also continued to invest in machinery, equipment and technology, which will undoubtedly be good news to the wider rural business community.”

Returns to rural businesses are improving, with 32 per cent confirming an increase in revenue from the previous year, and only one fifth saying their revenue has decreased, while 40 percent expect to make more sales than average in the coming quarter.

Looking ahead, the sector’s predictions for 2018 show promise, with one third expecting revenue to grow over the next year, while only 14 per cent expect their revenue to decrease.

Attitudes to technology

This year, MYOB also asked rural business how significantly they expected their industry to be changed by technology over the coming decade.

Concerningly almost 1-in-5 operators expects no change from technology, with 45 percent expecting only slight change and 35 percent expecting significant change.

Ms Luey says it is time for some in New Zealand’s rural sector to reconsider their approach to technological developments and embrace the opportunities of the future in the same way as they, historically, employed innovation to establish the country’s international farming reputation.

“For over 150 years, New Zealand farmers have been innovators. New Zealand’s reputation for ‘No. 8’ wire ingenuity came from our farming communities who had to make do with what was available to build an internationally successful industry.”

“However, according to our latest Business Monitor data, far fewer rural-based businesses are preparing for their industry to significantly change due to technology and most are embracing new technologies far more slowly than their city counterparts.” she said

Rural operators are the least likely to adopt new technologies, with close to half (43 per cent) saying they are reluctance to embrace tech advancements, in stark contrast to the 28 per cent of their metropolitan counterparts who say the same. 

According to the survey, one area where the rural community sees real promise is the development of robotics and automated machinery, with a third of the sector expecting these advances to alter their industry over the next 10 years. However, Ms Luey also warns that the sector should be aware of the many other tech trends that will prove to disrupt the industry over the next decade.

“There are many other technologies too that can provide extraordinary benefits in terms of efficiency, productivity and sustainability – all vital factors that will help shape the success of the industry in the decades ahead. Increases in mobile connectivity are driving on-farm productivity gains and cloud-based business management software gives managers more control over their operations.

“As dedicated supporters of rural business, MYOB is committed to doing everything we can to support our rural customers and partners as they acquire and apply the technology of tomorrow, to build simpler and more effective farming practices today,” says Ms Leuy.

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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.