Westpac Small Business Index unwinds post budget gains
- November Westpac-Melbourne Institute Small Business Index down 9.2 per cent from a post-budget high of 129.9 in August however remains in positive territory at 117.9 points this quarter
- Index special report finds almost half (44.6 per cent) of small business owners say they have seen an increase in the use of cashless payments
- Increase in cashless paymentsmost significant in ‘Wholesale & Retail Trade’ and ‘Hospitality & Recreational Services’ industries
The Westpac-Melbourne Institute Small Business Index released today has revealed that small business confidence declined 9.2 per cent to 117.9 points in November, however remains in positive territory following the record-high Index result in August.
The Index, which measures the confidence, current performance and future plans of the Australian small business sector, indicates small businesses still remain positive about their performance despite a 14.9 per cent drop in the Current Performance Index to 130.6 points, and a 4.7 per cent drop in the Future Performance Index to 134 points.
Westpac’s General Manager of SME, Julie Rynski commented that whilst small business sentiment pared back this quarter, the results are still positive, with small business owners feeling positive about future activity.
“It is no surprise that we have seen a decrease in the Index after the boost in confidence seen post federal budget announcement of small business incentives, albeit not enough to see it enter negative territory.
“We are still in an environment of lower rates and a lower Australian dollar, so we expect small business to remain optimistic, particularly in the lead up to the holiday period, for example in the hospitality industry, a net balance of 30.2 per cent of businesses are expecting to hire more staff.”
The November survey also showed that almost half (44.6 per cent) of small business owners have seen an increase in the use of cashless payments by customers, including ‘tap & pay’, mobile and online payments.
“Over 70% of the adult population now holds a card or device that has the ability to pay using new payment technology and small businesses must cater for cashless mobile Australians (RFi Group),” Ms Rynski said.
The survey has shown industries like Wholesale and Retail Trade, along with Hospitality and Recreation are among those who have seen a spike in its use; with 66.9 per cent and 68.9 per cent of business owners in these two industries, respectively, saying the use of cashless payments had increased.
“At Westpac we are always looking at ways in which we can innovate to support small business owners so they can focus on what they do best; managing their business and customers. We know by offering card and mobile pay solutions for small business customers it can help them save money in cash handling, gain more insights into customer spending patterns, reduce point of sale time and provide more efficient service,” Ms Rynski said.
‘Customers’ dominated as the factor of most concern to small business. On balance, more small businesses nominated ‘customers’ as the main positive factor affecting business performance (nominated by 54 per cent). In contrast, the ‘economy’ was nominated by over a third of businesses as having a negative impact on their performance (only 17.2 per cent nominated it as a positive factor).
“Building the confidence of our small business customers and inspiring better performance is really important to us, whether it be through investment in technology, specialist advice or insights to support the growth of the sector. Small business is the backbone of our economy and we will continue to provide solutions and help them grow to ensure the future prosperity of our nation,” added Ms Rynski.