Business confidence rose by nine points this quarter, to now sit at the highest level in more than five years among Australia’s small and medium businesses (SMBs), according to the latest Sensis Business Index (SBI) survey.
Sensis CEO, John Allan said “While sales and employment improved and prices remain positive, wages and profitability went backwards this quarter. These are not the results you would expect to see when confidence has lifted to a five year high.
“Rather than being driven by these indicators, confidence is instead being driven by perceptions that the overall economic environment is improving. On top of this, the non-cyclical influences remain strong, with businesses continuing to feel particularly positive about their own specific business strengths.”
The sector results were mostly positive, with Health and Community Services; Hospitality; and Finance and Insurance now sharing top spot, each on +58.
Confidence in the hospitality industry increased strongly making the sector an equal leader. Confidence in this sector increased markedly, up by 17 points to +58 which makes it one of three leaders on this measure.
Specific business strengths impacted most prominently on confidence. The biggest worries were sales and demand weakness.
Last quarter all key indicator results were better than the average. Sales (+23) and profitability (+14) recorded the highest net balances of all. This also applied to prices (+23), with wages (+23) and employment (+3) second highest.
This quarter, expectations are modest but positive in each case – sales (+17), profitability (+5), prices (+5), wages (+2) and employment (+1).
The Sensis Business Index uses a net balance score which is the difference between the percentage of businesses with a positive outlook versus the percentage of businesses with a negative outlook.
Small and medium businesses comprise 99 percent of all businesses operating in Australia.
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