Rural operators steam ahead despite primary industry struggles
10 Jun 2019
- Nearly one third (32%) of rural business operators report revenue growth
- Less than one quarter (23%) of primary industry businesses report an increase in revenue
- One in four rural business operators report experiencing a mental health condition
Despite recent reports of economic uncertainty and a raft of other business pressures, the rural business community continues to report sustained growth, according to the latest MYOB Business Monitor.
The nationwide survey of over 1,000 small and medium enterprises (SMEs) found nearly a third (32%) of rural business operators said their revenue had increased since March 2018, while just 14% said it had decreased. In contrast, more than a fifth (21%) of all SMEs said their business’ revenue or gross turnover had fallen since March last year.
However, those specifically from the primary industries sector did not enjoy the same level of growth. Only 23% of primary industry operators said their revenue had increased since last year, while 16% said their revenue had decreased.
Looking ahead, 29% of businesses operating in a rural town or region said their revenue will be up in 12 months’ time, while 26% of the primary industries sector said the same. In contrast, 32% of all SMEs said they expect to see their revenue increase over the next 12 months. Only 17% of rural business owners said their revenue will be down by March 2020, compared to 19% of all SMEs and the primary industry.
MYOB country manager Ingrid Cronin-Knight said the rural sector is a strong and resilient community, whose success is critical to New Zealand’s economy however more needs to be done to support those businesses in the primary industries sector.
“Made up of hard working Kiwi families, skilled migrant workers, and a growing group of entrepreneurs in agriculture, forestry and fishing, the primary industries sector is hugely important to our small economy, and the success of communities all over the country,” she said.
“Although overall rural businesses are performing well, the slowed revenue growth in the primary industries sector will be affecting the overall confidence of this sector, resulting in below average optimism for 2019.
“There is no doubt the sector is experiencing rising costs, technology disruption, shrinking price margins, cash flow challenges and pressure to meet compliance obligations – all of which impact confidence.
“Confidence in their business prospects has an impact on the sector’s willingness to invest. While most rural operators and agribusiness owners will maintain their investment in plant and equipment, IT systems and R&D this year, few have indicated they will increase it over the next 12 months,” said Ms Cronin-Knight.
Twenty-six percent of rural business owners said investment in plant and equipment will increase this year, while 11% said they would put more resources into R&D. Only one in ten will increase the amount they spend on IT.
Wellbeing and mental health
This year, MYOB asked rural business owners about their mental health and wellbeing in order to shine a light on this important issue affecting the sector.
According to the survey, one in four (26%) rural operators report experiencing a mental health condition since starting or taking over their business. Sixty-eight percent of those who reported a mental health condition said they had experienced depression, while 56% said the condition experienced was anxiety.
“The Government’s Mental Health Inquiry states that one in five New Zealanders will experience a mental health condition or significant mental distress in their lifetime. MYOB research therefore puts rural operators at greater risk of experiencing significant mental distress than the average New Zealander,” said Ms Cronin-Knight.
“While there’s no single reason for this, we do know that business owners – rural or not – often put more pressure on themselves to perform, maintain their business, pay staff and earn a living.
“Unfortunately, in a rural context these pressures can be heightened by feelings of isolation and a lack of immediate and accessible support.”
Ms Cronin-Knight said it’s also common for business owners to put in longer hours, skip meals and cut back on sleep to get things done – which can lead to greater stress, anxiety and in some cases, depression.
“With this in mind, it’s important to recognize the importance of self-care. This year, we should all take stock, and be aware of our mental health and wellbeing – seeking out help from family, friends, or a qualified counsellor when possible.”
If you, or someone you know needs help, or would like to talk to someone, the following helplines operate 24/7:
- Need to talk? Free call or text 1737 any time for support from a trained counsellor.
- Lifeline – 0800 543 354 (0800 LIFELINE) or free text 4357 (HELP). Lifeline also offers training in resilience and in suicide prevention awareness in the workplace. Visit www.lifeline.org.nz or contact firstname.lastname@example.org
- Youthline – 0800 376 633, free text 234, email email@example.com or online chat.
- Samaritans – 0800 726 666.
- Anxiety NZ – 0800 269 4389.