The latest Small Business Survey from the Australian Chamber of Commerce and Industry (ACCI) revealed a continuing trend of poor confidence prior to the release of the Government’s Budget last week.
March quarter results for small business conditions registered an index fall of 2.3 points to 42.0, which follows a 2.1-point drop in the second half of 2014. The results have been under the neutral 50 benchmark since the June quarter in 2010.
Small business forecasts were also negative, falling for the sixth consecutive quarter in March. The reading of 46.1 marked a 1.5-point drop from the result seen in the December quarter 2014.
Kate Carnell AO, CEO of the ACCI, said that it was “gratifying” to have small business be a big focus of the Government’s budget.
“We know that small businesses are the engine room of the Australian economy, and the measures announced in the Budget will turbocharge small businesses by giving them the confidence to grow, invest and hire new staff. We were pleased to hear Shadow Treasurer Chris Bowen give Labor’s support for these small business policies,” Ms Carnell said.
“The Budget initiatives, combined with record low interest rates, should help small businesses rediscover their mojo, which the survey shows has gone missing in recent months.”
While small business results have been negative overall, the medium and large business sector registered a more dramatic fall in conditions. The large business segment saw the biggest decline in sentiment, dropping 3.5 points compared to a 2.6-point drop for medium business and a 2.0-point drop for small business.
ACCI Senior Economist Scott Kompo-Harms said there were some positive areas for small business despite the widespread negativity.
“For the March quarter, small businesses reported falls in sales revenue, profits, employment, overtime utilisation and investment. Wages remained steady, while selling prices and non-wage labour costs increased.
“Looking ahead to the June quarter, there was an increase in small businesses’ expectations for sales revenue, wages, non-wage labour costs, selling prices, overtime utilisation and investment, but a fall in the outlook for profits and employment,” Mr Kompo-Harms said.
“We look forward to the results of the June quarter ACCI Small Business Survey to see what impact the Federal Budget has had on the attitudes of business operators.”