Sensis SBI Report December 2014

The Index, which reflects the views of 1,000 small and medium businesses, revealed 51 percent of small and medium business owners are feeling positive about the year ahead, with 24 percent reporting being worried.

Overall confidence levels are slightly down on last quarter at a net balance of 27, being the difference between the positive and worried businesses.

The report uncovered a growing gap between the experience of metropolitan and regional businesses, with declining confidence among regional businesses being the main source of declining confidence overall.

Sensis Chief Executive Officer, John Allan said: “Regional Australia is doing it tough. Confidence levels vary across the states, but in general, regional businesses are significantly less confident than their metropolitan counterparts about the coming year.

“Metropolitan businesses are more positive about the current state of the economy and more optimistic about the future of the economy than regional. They reported higher performance across all indicators and are clearly more optimistic on profitability,” he said.

“Much depends on the local factors driving the indicators we track. Factors such as the Australian dollar, taxation and levels of construction are important. Location also plays a big part, as evidenced by the results.”

On a state by state comparison, the SBI indicates the multi-speed economy continues.  Confidence dropped in New South Wales and Queensland as well as in the Northern Territory and the Australian Capital Territory.  Tasmania and Victoria both saw a big leap in confidence, while Western Australia and South Australia also experienced a rise.

 “In a mixed economic environment, some businesses continue to grow and invest while others are experiencing harder times.  This year is shaping up to be a year that sees a patchy economic recovery with a great deal of variation across the different states, and between metropolitan and regional areas,” said Mr Allan.

The picture is also varied across industries. Confidence in the finance and insurance sector, business services, transport and storage, as well as health and community services sectors is strong. The manufacturing sector continued its trend of having the lowest confidence levels, below retail and construction sectors.

Across the states, SME perceptions of the Australian economy in 2015 are mixed. South Australia, Western Australia and the Australian Capital Territory are more pessimistic than other locations. Those in Tasmania were most positive, with over 30 percent of SMEs believing the Australian economy will be better by the end of 2015.

Attitudes towards Federal Government policies are negative overall. South Australia, Western Australia and the Australian Capital Territory SMEs are all showing overall negative attitudes. Positive attitudes were recorded in Victoria, Tasmania, New South Wales and Queensland with the Northern Territory being neutral.

SMEs comprise 99 percent of all businesses operating in Australia.

 

For information contact: Libby Hay, Director Corporate Affairs  0475 801 277