The overall assessment of the economy has reached its highest level since December 2010. Almost three in ten (29%) small and medium businesses (SMBs) believe the economy is growing. This is nearly double the proportion who believe it is slowing (15%), resulting in a net balance score of (+14). This is according to the latest Sensis Business Index (SBI) survey.
Small business confidence also remains high despite a small decrease in confidence this quarter. There was a four point decrease in business confidence since last quarter – dropping from net +46 to +42 (59% confident – 17% worried). This is equal to the third highest confidence level recorded since March 2011.
Sensis CEO, John Allan said: “Small and medium businesses positivity about the economy continues its trend upward since June last year. Small businesses are telling us that the values of sales, prices charged and profitability are the areas they are most positive about in the year ahead.”
The Index, which reflects the views of 1,000 small and medium businesses from across Australia, also revealed that small business views of the Federal government have become negative for the first time since March 2017. Businesses saying Federal Government policies are supportive fell (18% to 17%), while those saying policies work against small business increased (15% to 20%). The net balance was down 6 points to -3.
Despite positive business confidence and perceptions of the economy, support for the Federal Government has fallen into negative territory for the first time in nine months. Small businesses who are unimpressed with Federal Government policies cite too much bureaucracy, and a focus on big business which has increased by 5 points, from 13 to 18%.
“Small businesses are telling us that access to finance was more difficult than last quarter, or at this time last year – decreasing 12 points to a net balance of +1, 14 points lower than December 2016,” said Mr Allan.
SMBs are finding it hardest to access finance in the Northern Territory returning a score of -10. It’s a similar story in Western Australia and Queensland with -8 and -2 scores in each. In terms of access to finance, Victoria is leading the way with small businesses reporting a score of +10.
Across the nation, business confidence was lower in each state but Tasmania, where it increased 10 points to +60 and in Queensland where it was one point higher at +43. Tasmania became the most confident state or territory while the Northern Territory remained the least confident, also recording the biggest decrease in confidence, down 14 points to +12.
Capital city confidence is again highest in Hobart (up 13 points to +65), followed by Sydney (up 6 points to +54). The least confident cities are Darwin which fell 13 points but still trails the rest with +15, and Adelaide which dropped 16 points to +29.
Metropolitan business confidence continues to outpace regional, by 9 points (+46 versus +37). This is despite confidence falling faster in metropolitan areas, down 4 points where regional confidence fell by 2 points.
Confidence remains relatively high in all sectors except transport and storage and retail trade, which both found conditions tough in the last quarter. Despite this, retail trade is showing some signs of a turnaround for this quarter and for early 2018.
At the state and territory government level, the only favourable ratings were for the Tasmanian, NSW and NT governments. The SA government remains the most widely criticised by SMBs.
For the full Sensis Business Report, click here.