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 that the growth and development of heartland New Zealand is vital to NZ’s economy.
“Our country’s success is built on our rural industries. The past few years have proven to be testing with a challenging international environment depressing farm-gate incomes. However, we’re pleased to see our rural operators reporting solid economic improvements,” she says.
“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 per cent 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 businesses how significantly they expected their industry to be changed by technology over the coming decade.
Concerningly almost 1-in-5 operators expect no change from technology, with 45 per cent expecting only slight change and 35 per cent expecting significant change.
Carolyn says it is time for some in NZ’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 more than 150 years, NZ farmers have been innovators. NZ’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 says.
Rural operators are the least likely to adopt new technologies, with close to half (43 per cent) saying they are reluctant 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, Carolyn 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 Carolyn.