SMB confidence was lower but remains at one of the highest levels observed in the past five years. The results vary considerably by both region and industry segment. Key indicator results improved last quarter overall and expectations for the current quarter are generally more positive. SMBs also expect the economy to strengthen.
The key findings of the Sensis Business Index for September 2016 are:
- SMB confidence decreased by six points to a net balance of +38. This was down from the highest level recorded in the last five years last quarter and is still 11 points above the September 2015 result.
- Confidence was well above the national average in NSW (down five points to +53) and Tasmania (up 22 points to +52). It was around the average in Queensland (up three points to +39) and the ACT (down 14 points to +35). It registered +31 in both Victoria (down 15 points) and SA (up two points). A long way back were WA (down 10 points to +10) and the NT (down 14 to +9).
- The overall assessment of the economy is still negative. More SMBs believe it is slowing (23%) than growing (15%). The net balance of -8 was the same as last survey. However, SMBs are sensing a more healthy economy in 12 months’ time, with the net balance moving from -6, to -3, to +5 over the last three surveys.
- Last quarter, all of the key performance indicator results were slightly better but there remains plenty of scope for improvement.
- For this quarter, the expectations for all indicators were positive and higher on balance for sales (up five points to +26), profitability (up three points to +19), wages (up three points to +15) and employment (up four points to +9). For prices the net balance was one point lower at +17.
- The main impediment to taking on new employees continues to be a lack of work or sales.
- With the survey taken just after the Federal Election, perceptions of the Federal Government did not shift this quarter. The net balance remained on +2. Tax cuts, incentives and being supportive of small business are the main reasons for positive perceptions of the Government. Too much of a focus on big business and excessive bureaucracy and red tape were the biggest concerns.
- Most of the state and territory governments are rated negatively, especially in SA (-28), Victoria (-24) and Queensland (-18). The results for WA and NSW were -7 and -4 respectively. The NT Government was best regarded (+4), which is ironic because it has since been voted out of office. The governments in Tasmania (+3) and the ACT (+1) also recorded a positive rating.