The latest Small Business Survey by the Australian Chamber of Commerce and Industry (ACCI) has revealed the nation’s small businesses are expecting a difficult year ahead.
Reflecting the performance from the December quarter and the expected performance for the year ahead, the survey showed a pessimistic outlook for small businesses (defined as having fewer than 20 employees) on most key measures of activity.
The ACCI’s index of Expected Economic Performance fell for the fourth quarter in a row, hitting a below 50 reading for three quarters. According to the ACCI, “a reading below 50 indicates that the mood among respondents is more pessimistic than optimistic.”
Larger businesses were found to be overall more optimistic than their smaller and medium-sized counterparts, though all businesses recorded Expected Economic Performance results below 50.
“Small businesses are the backbone of the Australian economy, and when they are under stress they are less likely to invest, innovate and create jobs,” Kate Carnell AO, CEO of the ACCI, said.
“Our survey asked small businesses about the factors that were constraining them, and the results carry important messages for policy-makers. Small businesses identified business taxes and government charges as their biggest constraint, followed by insufficient demand, import competition and non-wage labour costs.”
ACCI Senior Economist Scott Kompo-Harma echoed Ms Carnell’s sentiments, suggesting that although certain indexes did see a rise, the overall negative results highlight a need for prolonged improvement.
“The latest survey results show that small business experienced painful trading conditions in the December quarter, with all indicators except for wages and other labour costs in contractionary territory,” Mr Kompo-Harma said.
“Some small comfort can be taken from the fact that the selling prices, profits, employment and investment indexes all rose, but they all remain mired in negative territory. The improvement would need to continue for some time yet before we could say the outlook of small business has turned to optimism.”
