The latest ACCI Small Business Survey results reveal business conditions remained tough throughout the September quarter, with small business owners remaining pessimistic about economic conditions.
The Survey assessed business conditions and business confidence amongst 1,299 small businesses around the country over the July, August and September 2014 period. Current indicators for small business conditions, sales revenue, selling prices, profits, employment, overtime utilisation and investment were all firmly in contractionary territory. Also, most expectations indicators fell across the board.
ACCI CEO Kate Carnell said the survey suggested poor sales and profit results have weakened business owners’ appetite to take risks and expand.
“While there has been a little improvement in some aspects of the survey, most small business operators are concentrating on just keeping their heads above water,” Carnell said. “The fact that insufficient demand is now the number one constraint on small business investment reinforces this, and this lack of demand has gradually been getting more important as a constraint over the last few years.”
ACCI Senior Economist Scott Kompo-Harms added that the overall results of the survey paint a sombre picture.
“The best news that can be gleaned from the results is that small business profits, employment and investment improved somewhat in the quarter, although they are coming off a low base,” Kompo-Harms said. “The readings are still quite poor and will need to improve for some time just to get back to a neutral footing.
“When small businesses make profits, they feel more able to take risks, invest in new equipment, hire people and expand production. When more people have jobs through increased opportunities and the right incentives to work hard and get ahead, they can afford to spend more and businesses of all sizes prosper. That’s what we’re not seeing.
“Governments need to address penalty rates, payroll tax and the broader tax burden and continue to reduce red tape. Access to staff with the appropriate skills remains a problem.”
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