Rural businesses outdo growth forecast

Rural businesses outdo growth forecast

Last March 29 percent of these businesses forecast revenue growth for the year to February, but 34 percent achieved improvement, according to MYOB's most recent Business Monitor Rural Report. Forty-one percent were confident revenue would grow further throughout the year.

Adam Ferguson, MYOB's accounting division general manager, says such confidence in a sector that is normally conservative in its predictions underscores the real strength of the rural economy.

"The rural sector operators don’t usually overstate their expectations – as the 2013 survey shows. So when over 40 percent of rural SMEs report they are expecting improved revenue in the year ahead and only 10 percent for it to decline – we can be confident that the sector will do well in 2014.

"This is especially good news for the regions that rely so much on the flow-on from the rural economy."

In the first quarter (February to April) 33 percent of SMEs outside cities reported more work and over a fifth of owners in the sector intended to increase wages and salaries between now and next February.

"An overwhelming majority of rural business owners intend to maintain a stable level of fulltime employees, and 16% of SME operators say they will increase the number of part time roles they offer this year," Ferguson says. "But with wages on the rise we are also likely to see prices increase too, with close to a quarter of the sector planning to improve their margins."

Rising fuel costs and interest rates were the dark cloud on the horizon, with more rural businesses reporting financial pressure in these areas than the SME average, says MYOB. Thirty-seven percent reported fuel price pressures compared with the SME average of 25 percent, while 31 percent were pressured by cashflow and 30 percent by interest rate rises, as against SME averages of 21 percent and 22 percent respectively.

Rural businesses were increasingly getting online, with 27 percent operating a website, up from 22 percent last March. Another six percent used a social media site for their business while those adopting cloud products and services had doubled to 16 percent.

Sixty one percent said their business website had generated more leads and 47 percent said it made it easier for customers to do business with them.