SME business confidence slid again in the September quarter, with many reporting feeling less optimistic about future activity thanks to volatility in global financial markets and the high Australian dollar.
According to NAB’s Quarterly SME survey, business confidence is sitting at -10. NAB said this decline is consistent with a weakening in confidence reported by larger businesses in the NAB Quarterly Business Survey.
During the September quarter, confidence deteriorated sharply in small transport, business services and health, while strengthening in property and becoming slightly stronger in construction and retail. Transport sentiment was the weakest of all industries, while confidence was strongest in property.
Confidence levels were marginally improved in WA – the most optimistic state – but were either weaker or unchanged across all other states. NSW and SA are now the least confident about near-term activity.
For the quarter, business conditions remained in negative territory at -5, with NAB reporting that SME conditions remained weak and poor and were a little worse than those reported by larger firms.
Wholesale and manufacturing conditions deteriorated sharply in the quarter, while in contrast, accommodation, cafes & restaurants and business services reported notable improvements in activity. Conditions were strongest in business services, health and finance, and weakest in retail, transport and property services.
By state, conditions improved in Queensland, while conditions deteriorated in all other states, with the most marked falls in WA, NSW and Victoria.
Cashflow remained subdued in the September quarter, and deteriorated very sharply in property services, retail, manufacturing and accommodation, cafes & restaurants, while it strengthened in finance, business services and construction.