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Business confidence slides further, but SMBs remain positive on outlook

Despite business confidence continuing to fall as a result of weak consumer spending, half of SMBs remain optimistic about their ability to ride out the tough times, a new report has found.

According to the Sensis Business Index for the June quarter, poor consumer spending means confidence is lower now than for the same time last year, but half of business owners surveyed feel confident about their business prospects for the next year.

Overall, five in 10 businesses are confident about their business prospects for the next 12 months, while three in 10 are worried.

The report found those positive-feeling owners believe that having an established and experienced business operation, good customer relations, forward orders and contracts, and a hope that conditions would improve, would see them through tough times.

Despite this, a quarter of owners reported feeling worried about consumers not parting with their cash and said they also feel vulnerable to the current global economic conditions.

The report also revealed SMBs are expected to suffer further weakening in sales and profits over the next 12 months, but report author Christena Singh says it’s not all bad news.

“The sales and profitability indicators continued to weaken during the quarter, and remain strongly negative. However, the employment indicator improved sharply, following three consecutive quarters of declining results. We have also seen the strongest capital expenditure and export value results in over a year,” she said.

Business confidence fell in most states and territories during the quarter, with the largest fall in Western Australia. The Northern Territory and Queensland are the only states or territories to record increases. Overall, Victoria has the highest level of business confidence and South Australia the lowest.

The report also found small businesses in metropolitan areas are also significantly more confident than those in regional areas.



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Claire Hibbit

Claire Hibbit

Claire Hibbit is an intern at Dynamic Business and has just completed a Bachelor of Journalism, majoring in Communication and Media Management from the University of South Australia. She enjoys all things media and travelling.

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