SME business confidence is on the dip as fuel prices, cashflow, price margins and profitability give business owners a headache, according to the latest MYOB business monitor.
The bi-annual survey, conducted a month before the change of government, found SME confidence to be on the slip.
Less than a quarter (23%) thought the economy would improve in the following 12 months, down from 25% when the survey was last done in March. Revenue expectations are also down – a quarter expect their revenue to rise in the following year, down from 30% in March. And 22% are expecting revenue to fall, up from 19% in March.
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MYOB chief Tim Reed says political uncertainty leading up to the election might have contributed to the poor result – 26% of SMEs surveyed said they didn’t trust either party to appropriately manage the economy.
“We hope to see a boost in SME confidence now the election verdict is in, but our research suggests it will be a slow road to significant improvement in the health of our economy and our business outlook,” Reed said.
“The financial confidence of the country’s small to medium business operators is closely linked to the health of our economy and it is telling us a clear story. They see factors at play such as record-low interest rates and although many welcome the upside, they recognise it as a sure sign the domestic economy is experiencing slowed growth.”
The survey also asked SMEs to report on their revenues over the past year. This showed a manufacturing and wholesaling industry in trouble – 54% of such businesses had seen a revenue fall in the 12 months to August. More than half (53%) of operators in agribusiness, forestry and fishing also saw a revenue fall.
Finance and insurance had a good year though – 30% reported their revenues were up.
Businesses in Victoria and Western Australia were most likely to see their revenues rise over the past year, while half (49%) of South Australian SMES surveyed reported a revenue fall.
Asked what was causing them the most pressure, most SMEs reported fuel prices. Cashflow rose to become the second most-cited pressure – unsurprising given the latest Dun & Bradstreet survey found businesses were waiting 54 days to be paid.
Interest rates, which were cited in March as the sixth biggest pressure on SMEs, dropped to ninth place.
Asked what areas they were most likely to spend time and money investing in, 35% of the SMEs surveyed nominated customer retention strategies.
Another 30% cited customer acquisition strategies as their biggest focus.