Confidence Booms For Small Businesses

A report by Sensis Business Index suggests small to medium businesses are feeling much more positive about their economic future than they were last year.

The latest Sensis Business Index report has revealed confidence levels among small and medium sized businesses (SMEs) have risen by 16 per cent, following a steep decline recorded earlier in the year.

The report, which was based on a survey of a thousand SMEs, revealed 53 per cent of small businesses are centhusiastic about the year ahead, up from 47 per cent in June, with only a quarter of businesses are worried about their prospects. Encouragingly, the SBI shows that businesses are feeling more positive about the economy overall.

“Businesses that were confident reported that they had a solid customer base, good profitability and a steady pipeline of new business. The report found that a lack of work or sales is the most pressing problem faced by small business,” says Sensis chief executive officer, John Allan.

The economic climate, competition, bureaucracy and cash flow were among other challenges that businesses reported.

The finance and insurance sector recorded the highest confidence level, while confidence above average in the wholesale trade and health and community services sectors and at its lowest confidence in the manufacturing sector.

According to the report, with economic expectations for the year ahead improving, the next 12 months look positive on key indicators. SMEs are more likely to be expecting increases in sales, employment, wages, prices, profitability and capital expenditure than in the previous quarter.

The report also found support for the Federal Government among SMEs remains soft, despite a five percentage point increase over the last quarter. SMEs in the manufacturing sector and businesses in the ACT were the most critical of Federal Government support.

“Business owners are supportive of the Government’s aims to reduce debt, red tape and boost the economy. However, there are perceptions that the Government is more focused on big business, that there is too much bureaucracy, and that their policies are affecting consumer spending,” says Allan.

Have your say: Have you noticed an increase in business over the last year? Do you think consumers are becoming less cautious with their money?

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