SME profits up: Economy roundup
Wednesday, February 6, 2008/
Almost half of Australian SMEs reported good or very good profits in the December 2007 quarter, according to the NAB quarterly SME survey released today.
NAB’s profit index for SMEs lifted nine points in December, to be 31 points above the line separating profitability from loss, with only 12% of SMEs reporting poor or very poor profit levels for the quarter.
Business conditions were also strong in the three months to December, with SMEs reporting strong consumer demand as by far the biggest contributor to the positive environment.
SMEs were less positive about the outlook for the year ahead, with annual profit expectations declining slightly compared to the previous quarter.
The smallest business are most confident about their profit outlook than medium and large businesses, with small business in the property services, health, transport, business services and retail sectors reporting the most positive outlook.
Among medium and large businesses, the finance and property services sectors are the most confident.
Turning to the property market, and defaults on prime mortgages – which constitute the vast majority of home loans – declined in December 2007, according to Fitch Ratings. Mortgage delinquencies in December fell to 1.07%, the lowest level since December 2005.
And on the markets, the S&P/ASX200 has fallen lower on a weak US lead – the Dow Jones Index fell 2.93% overnight – and poor base metal prices. At 12.30pm the benchmark index is down 2.3% on yesterday’s close to 5660.8 points.