According to the Sensis business index (SBI), small and medium businesses (SMBs) have overall pessimistic perceptions of the Australian economy. The SBI, which has been tracking the confidence of SMBs since 1995, released findings in late May supporting the claim that SMBs owners believe the economy is slowing rather than growing.
When broken up into States, NSW fairs the best in terms of confidence whilst QLD, SA and WA were showing concerning signs. Regardless, all states on the whole perceived the current economic climate in a doubtful way.
Although overall confidence was low, one point of relief is that these rates had been shown to be relatively stable since last year’s results. These findings come as a results of SBI’s survey of approximately 1,000 SMB owners. A promising finding of the SBI is that 49% of SMB owners are feeling more confident for the coming year, with a manageable 22% being concerned for the coming year.
The general confidence in the upcoming year paired with a supportive 2015 budget for SMBs is a promising sign for the Australian economy.
The main concerns for those worried about the state of the Australian economy or the imminent year of business includes:
Aside from the more obvious concerns for SMB owners, there are additional concerns that many have failed to consider that impact on their perceptions and confidence in the current economic climate. These include excessive bureaucratic requirements for SMBs in the finance and insurance sector, competition in the wholesale sector, and the looming likelihood of growth in ever-present overhead expenses.
Such concerns, however, are being offset despite a soft last financial quarter. Last quarter SMB owners claimed to have a slightly easier time sourcing finance and as a result experienced increased success in doing so.
The results gained for the specific States regarding SMB owners’ overall confidence in the coming year were shown to greatly reflect their perceptions of the State government. For example, in NSW which had the highest confidence level out of all States, the perception is that the State government is supporting the building industry, reducing bureaucratic red tape, and investing money to stimulate the economy. On the other hand, in QLD where the most significant drop in confidence occurred, SMB owners failed to see how the State government understood the situation of SMBs. They were also concerned about increasing costs enforced by the State government.
The influence of government in the confidence of SMBs cannot be ignored. At a federal level, the recent release of the 2015 budget will surely stir some alterations to the confidence of SMBs. The budget is largely positively geared towards SMBs, with the intention of this being to increase confidence and stimulate spending and growth within the domestic market.
SMBs account for over 90% of Australian businesses, meaning their current state is greatly significant on the welfare of the overall Australian economy. The following 12 months for SMBs is sure to be of interest to many Australians.