Small business confidence remains steady, according to the February Westpac-Melbourne Institute Small Business Index, which has recorded an increase of 0.8 per cent to 124.0 points, up from 123.0 in November.
The Index, which measures the confidence, current performance and future plans of the Australian small business sector, has increased 3.8 per cent (4.6 points) over the past 12 months, with 56.9 per cent of small business owners agreeing that their business’ financial situation is better than it was at this time last year.
While there have been unfavourable fluctuations in sentiment over the past 12 months, Westpac’s General Manager of Small Business, Julie Rynski, says small businesses are starting the year more confident about their financial situation and future business activity than they were this time last year.
"Despite unexpected declines experienced in Hospitality and Recreational Services and Wholesale and Retail trade over the historically busy Christmas period, the Small Business Index has remained in positive territory over the past 12 months. This result is attributed to a number of factors including the lower Australian dollar, which is encouraging domestic spending; falling petrol prices; and expectations of an interest rate cut, which eventuated earlier this month.”
The ‘economy’ has once again been listed as the main negative factor affecting business performance (38.5 per cent), followed by ‘customers’ (29.7 per cent) and regulation (23.3 per cent).
The results by state reveal slight improvements in the performance of small businesses in Queensland (increase of 6.4 points) and Victoria (increase of 1.3 points) in contrast to a slight drop in NSW (down 1.2 points) and a significant decrease in Western Australia (down 16.8 points), which has been significantly affected by falling commodity prices this quarter.
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