Aussie small and medium business confidence reaches nine-year high: Sensis

| February 5, 2019

The December Quarter 2018 Sensis Business Index has revealed that small and medium business (SMB) confidence across the country has reached a nine-year high.

The report, which measures SMB activity, expectations and confidence over a three-month period, found confidence levels increased eight points to +50, the highest level recorded since December 2009, with Victoria claiming the top spot, due to a post-election surge to +55 (14 points higher than the September Quarter report).

Metropolitan SMBs were once again found to be more confident than their regional counterparts, recording balances of +58 and +38 respectively. Overall, prospects for the year ahead were also strong particularly in sales, with over 40% of SMBs expecting growth in this area to indicate a rewarding 2019 ahead.

Sensis Chief Executive Officer John Allan said it’s great to see over 64% of small and medium business owners report they feel confident in their business prospects, particularly as the survey was completed as they headed into the Christmas period.

“The report also shows that expectations for 2019 were positive across the majority of business indicators, which is extremely encouraging given the disruption of the coming Federal Election,” Mr Allan said.

At an industry level, Hospitality was found to be the most confident sector, recording a massive increase of 36 points to a record high index of +71. While Retail remained the least confident (+26), it recorded an increase of 14 points which indicates the sector maintained positivity ahead of its busiest period.

When looking at views of the Federal Government, SMBs made it clear they don’t feel their business is affected by decisions made in Parliament, with 62% reporting Federal policies had no impact on their business – increasing from 57% in the previous quarter.

“The perception that Federal Government policies do not affect small and medium businesses has grown in popularity over the years among SMBs, which could suggest they are becoming increasingly resilient toward Government changes.”

Despite a growth in sales predictions, perceptions of the economy continued to fall for the third quarter in succession, with 61% feeling they will see no change in the economy in 12-months’ time.

“It is interesting to highlight that SMBs are more confident in their own sales over the next 12-months than they are in the Australian economy and we hope to see businesses maintain this confidence throughout 2019,” Mr Allan said.

Other findings from the report:

  • Access to finance continues to decrease, falling four points to -21; the lowest recorded balance since 2013. SMBs are also reporting that time to pay is pushing out and is becoming an issue.
  • Capital expenditure trends fell again to -8 despite confidence being high.
  • Higher wages were recorded by 21% of SMBs with a fall reported by 12%. The net balance of +9 is three points lower than last quarter but the same as recorded this time last year.
  • Profitability performance has remained negative since March 2015, recording a balance of -1. However, expectations of the next 12-months have increased – with 40% believing profitability will increase during 2019.

Want to learn more. View the full report here.

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