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Press Release

GE Capital releases data showing the NZ mid-market requires greater support and access to capital to grow.

August 14, 2012

GE Capital releases data showing the NZ mid-market requires greater support and access to capital to grow.

Auckland, New Zealand: New research into the mid-market business sector has revealed that while it accounted for fewer than 5% of all NZ enterprise in 2011, it produced almost a third of all business revenue and one in three full-time equivalent jobs.

The analysis, released by GE Capital today, is the first of its kind to look at the contribution the mid-market (defined as businesses generating between $2 million and $50 million in annual revenue) makes to the country's economic performance.

Globally, the World Bank has calculated that New Zealand has the highest density of enterprises per head of population in the OECD, but a low proportion of high-growth enterprises on a revenue basis. And, according to GE Capital, the number of NZ mid-market companies is growing at a greater rate than any other sector, up 3% between 2007 and 2010, at a time when the total number of Kiwi businesses inched up only 0.3%.

GE Capital Managing Director, Aaron Baxter, said that while it was clear the mid-market sector was a vital contributor to the economy it was often overlooked and would benefit from greater recognition and support.

"Currently, small business can access government assistance and large business is effective at leveraging its size to influence policy. Our research shows that the mid-market can be lost in the middle and is often misunderstood.

"Despite this, the mid-market punches significantly above its weight and is the cornerstone of the NZ economy, contributing strongly to jobs and business revenues. So, as we seek to capture the benefits of the Asian boom and prepare our business sector for a new global economy, the mid-market presents itself as an opportunity to drive stronger economic growth and boost our nation's productivity," Mr Baxter said.

Key findings on the mid-market:

The mid-market is a significant contributor to New Zealand's economy:

  • As at 30 June 2011, there were 20,536 mid-market businesses in New Zealand, making up 4.6% of all NZ enterprise.
  • The mid-market is estimated to contribute $61 billion in value added to the economy and just over 417,000 full-time equivalent jobs. This amounts to approximately 31% of all industry value added and all jobs across all business sizes.

The mid-market is diverse by sector and geography:

  • The mid-market covers a wide range of industries, with the largest concentration of businesses in the retail trade and accommodation and food services sector (17% of mid-market enterprise), followed by wholesale trade (15.2%), manufacturing (12.3%), and professional, scientific, technical services and administrative and support services (11.4%).
  • The highest number of mid-market businesses per 10,000 population are in the Marlborough and Nelson regions, with 48.2 and 45.9, respectively.

The success of the mid-market differs to other sectors of New Zealand's economy:

  • The total number of mid-market businesses increased by 3% between 2007 and 2010, while the total number of businesses increased by just 0.3% in the same period.
  • The fastest growing area within the mid-market has been the agriculture, forestry and fishing industry, which saw a 41.4% increase between 2007and 2010.
  • The highest decreases in the sector between 2007and 2010 were in rental, hiring and real estate services with 236 fewer businesses or a 19.6% decrease.

The mid-market faces unique challenges and barriers to its growth:

  • Overshadowing mid-market growth is the fall-out from the Global Financial Crisis and on-going uncertainty about the Eurozone, as well as the impact of the Christchurch earthquake.
  • Funding for mid-market businesses in the aftermath of the GFC has been significantly impacted with tightened availability, more conservative lending practices and the collapse of more than 50 finance companies since 2007.
  • The mid-market is often misunderstood and hard to define. As a result, it is often overlooked in public policy debate and discussion.

"If we are to evolve as an economy, we must put out resources and expertise into assisting the mid-market to overcome its barriers to growth. Both in helping understand the sector better and in providing greater access to capital, we are committed to helping the mid-market succeed," Mr Baxter said.

Katie Lennon
Corporate Communications Leader
[email protected]
+61-2-9324-7095
+61-(0)-406-316-907


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