New Zealand’s small and medium-sized businesses are on high alert as global tensions put pressure on fuel prices and supply, with a new pulse survey by MYOB of 230+ SME decision-makers showing high levels of concern and that preparations are already underway to mitigate operational and financial impacts.
More than half (55%) of the SME business owners and operators polled said they were ‘very’ or ‘extremely concerned’ about the impact of the Middle East conflict on fuel pricing and supply, while a further 27% said they were ‘moderately concerned’ and 16% slightly concerned. Overall, just 3% of respondents said they weren’t concerned at all.
For six in ten (61%) of the SME operators surveyed, fuel – either directly or via transport and logistics – is ‘critical’ or ‘very important’ to their ability to operate, and the flow-on effects from the current crisis are being felt across multiple areas of business operations.
Just over half (52%) of those surveyed said higher fuel costs hit their business the most through supplier price increases, followed by the costs of the business’s own fleet (47%), courier and freight costs (41%) and supply chain disruption (30%).
MYOB chief customer officer Dean Chadwick says that local SME operators are monitoring the situation closely and poised for action.
“The conflict escalation in the Middle East is a blunt reminder of how quickly global events can flow through to local business conditions, particularly when it comes to a commodity like fuel. For many SMEs, fuel isn’t optional – it underpins everything from getting goods to market, transporting their own supplies, traveling to connect with customers and keeping day-to-day operations running,” says Chadwick.
“Leading into this year, we saw sentiment and revenue gradually lifting for more SMEs in New Zealand, with many planning to capitalise on improving economic confidence. Now, faced with another major economic challenge, attention has turned quickly to assessing what fuel supply and pricing levels mean for their business and how they can get ahead of it.
“On top of monitoring pricing and supply information from suppliers, industry bodies and government sources, our insights show that local business owners are reassessing their own pricing plans and structures, and modelling how a prolonged disruption could affect their costs and cashflow.”
Looking into what action SME decision-makers would take if the issue were to intensify significantly over the next month (including changes like potential fuel restrictions), increasing prices to customers is top of the list (37%) for those surveyed, followed by reducing their spending in other areas (35%), encouraging team members to work from home or reducing days on site (16%), and changing transport or logistics arrangements (16%). Increasing stock levels and reducing operating hours are also being considered by some of the SMEs surveyed.
“While the current pressures are outside a business owner’s control, there are still practical steps SMEs can take to stay on the front foot – from regularly reviewing costs and maintaining visibility over cashflow, to having open conversations with suppliers and partners about pricing where needed,” says Chadwick.
“This is also a time where broader support can make a real difference. For the wider public who are also feeling the pinch, choosing to support local businesses where possible, paying promptly and recognising the pressures operators are under, can all help SMEs navigate what could be a very challenging period ahead.
“New Zealand’s small and mid-sized businesses are resilient, but they don’t operate in isolation. Sitting at the heart of our communities across the country, ongoing local customer support will play an important role in helping many businesses manage through the pressures and uncertainty they’re feeling once again.”