Confidence among small and medium businesses (SMBs) is at its highest level since March 2010, according to the latest Sensis Business Index (SBI) survey.
The SBI, which reflects the views of 1,000 SMBs from across Australia, revealed that more than four times as many SMBs (61 per cent) are feeling confident as those who are worried (15 per cent).
“Businesses closed out 2016 on a high, with confidence up seven points for the year and expectations that 2017 will be even stronger,” Sensis CEO John Allan said. “While business owners again felt optimistic about their own specific business strengths, it was the improvement in the perceptions of the economy that really drove confidence higher this quarter.”
Perceptions of the current state of the economy have moved into positive territory, jumping 11 points, which is the best result since December 2013.
“Just as the stock markets shrugged off global uncertainty to finish 2016 on a high, it was also the case for Australia’s small and medium businesses,” Mr Allan said. “Perceptions of the economy are now in positive territory for both the short- and long-term projections and this points to a strong year ahead.”
Businesses expect all of the key indicators – sales, employment, wages, prices and profitability – to remain positive this year, with strong results anticipated for sales and profitability in particular.
At an industry level, the biggest improvement was in finance and insurance, up 31 points and now leading the other sectors following strong sales results. The biggest concern was in retail trade, down 23 points due to poor sales, and cost and competitive pressures.