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Why Australian small businesses remain confident after the federal budget

Jenneth Orantia
Smarter Writer

Jenneth Orantia is a journalist who has been reporting on tech developments and trends for the last decade

Jenneth Orantia
Smarter Writer

Jenneth Orantia is a journalist who has been reporting on tech developments and trends for the last decade

Australian small businesses are remaining positive about their performance this quarter, according to several business surveys.

white collar workers ready to run a race

The Westpac-Melbourne Institute Small Business Index

According to the Westpac-Melbourne Institute Small Business Index, the business confidence index has risen 3.8 per cent this quarter, with a massive 22.7 per cent sentiment lift in Queensland offsetting minor falls in some of the other states, with 40.1 per cent of small businesses considering the economy to be the top negative factor affecting business performance. The response from small business and consumers following the recent Budget announcement will be critical to the change in sentiment and business activity over the next quarter, according to Bill Evans, Westpac’s global head of economics.“We have seen a 6.8 per cent fall in the Westpac Melbourne Institute Index of Consumer Confidence indicating that households may wind back some spending. That will have a direct impact on small business,” says Evans. 

 

The Commonwealth Bank Future Business Index

The Commonwealth Bank Future Business Index recorded lower confidence levels, although the index remained at its second highest level since the survey began in September 2011, with 50 per cent of organisations across the mid-market anticipating revenue growth during the next six months. The index also showed the mining and construction, and property management industries enjoying an increase in confidence over the last quarter, with government, health and education organisations, and retail and transport and logistics industries recording sizeable drops.

We've seen a 6.8 per cent fall in the Westpac Melbourne Institute Index of Consumer Confidence indicating that households may wind back some spending. That will have a direct impact on small business.

- BILL EVANS, WESTPAC

The MYOB Business Monitor

Similar to the Commonwealth Bank Future Business Index, the latest MYOB Business Monitor revealed 38 per cent of start-ups expect revenue to rise in the next 12 months, with fuel prices topping the list of business pressures for start-ups. Customer retention strategies, the number or variety of products or services offered and the sale of products or services online were among the top five areas of increased investment for start-ups in 2014.

The CPA Australia Asia-Pacific Small Business Survey 2013

The CPA Australia Asia-Pacific Small Business Survey 2013 found that small business confidence for the economy in 2014 is down significantly in Hong Kong and Malaysia and also slightly down for Singapore and Indonesia compared to 2013. However, both Australian and New Zealand small business confidence in the economy is stronger than in previous years. The survey also showed that while Australian businesses were less optimistic about their prospects for growth than in the previous year, nearly one in five small businesses expecting to increase employee numbers in 2014.

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