Findings from the second Westpac-Melbourne Institute Small Business Index, released today, suggests that Australian small businesses are now more positive about the performance of their industries than they were three months ago.
According to the Index – which is conducted quarterly and canvasses the opinions of 300 small business owners nationwide about the economic health of Australian small businesses – 40.1 per cent of small businesses cited the economy as the top negative factor affecting business performance, while falling consumer confidence named as likely to impact on small business performance over the next quarter.
“The overall lift in sentiment can be largely attributed to a sharp increase in Queensland, of 22.7 per cent, which is offset by minor declines in New South Wales, Victoria and Western Australia, which fell by 4.1, 4.1 and 6.0 per cent respectively,” Julie Rynski, Westpac’s General Manager of Small Business, said. “On a whole, it is encouraging to see small businesses continue to be optimistic with their business outlook and hiring intentions.”
“The Index is showing that macroeconomic conditions are still a major concern for small business, however, there is a continued degree of confidence amongst the sector,” added Bill Evans, Westpac’s Global Head of Economics. “Even though there was little in the Budget which would affect small business adversely, the concern will be the impact the Budget has on household confidence and subsequently demand.”
Looking ahead, the Index revealed that small businesses with turnover above $2 million were more positive about future activity, with a net balance of 38.7 per cent indicating that they expected business activity to increase in the next three months. Among industry groups, small businesses in Wholesale and Retail trade were the most optimistic about future business activity (net balance of 41.0 per cent).
Further findings from the survey include:
- The Index rose 3.8 per cent to 123.9 in the second quarter, indicating continued performance and optimism of small business in Australia.
- ‘Customers’ remains the top positive factor affecting small business performance (nominated by 53.4 per cent of small business).
- 36.2 per cent of small businesses said that they use social media to communicate with customers, with Facebook being the most popular channel.
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