Thursday, May 5, 2011
SME Confidence Now Back Despite Worsening Conditions
Demand was the only constraint to SME’s that had a significant rise. Borrowing costs, staffing, global economic uncertainty, and cash flow were considered less significant constraints on long-term decision making in the March quarter.
There are signs of optimism that are seen but it is still a challenging time for SME’s. This is according to NAB Business Australia Executive General Manager, Daryl Johnson.
“During the March quarter, SME confidence levels were up from five to eight (index) points, with all SME industries returning to positive territory,” Mr. Johnson added.
He said that “this suggests they are more optimistic about future conditions and are looking forward to the post-flood recovery period. Despite this optimism, SME business conditions have remained on a gradual decline from the post-GFC peak in December 2009, pushed down again by the recent floods that are estimated to have reduced national business revenues by 5 per cent in January.”
Western Australia and Victoria recorded the highest levels of confidence for the second consecutive quarter. Confidence levels are positive across each state. However, business conditions deteriorated in all major states except for South Australia. Queensland, on the other hand, has the largest deterioration while Victoria has the strongest.
“Fifty eight per cent of SMEs report that sales and orders are a more constraining factor on output than finding suitable labour (45 per cent). Regarding profitability, 40 per cent of SMEs surveyed believe demand remains the most significant profitability constraint in the next 12 months, while availability of suitable labour (13), wage costs (11) and interest rates (8) were less significant,” Mr. Johnson said.
The survey revealed that industry-wise, the strongest was business services and finance whilst the weakest was construction and retail.
News and Image from: International Business Times »