The business-to-business services sector is set for a gloomy Christmas trading period, according to the latest Sensis Business Index.
The survey, conducted quarterly, saw 1,800 SMEs interviewed between October and November about their perceptions and activity in the lead-up to Christmas.
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The survey reveals a third of businesses are expecting conditions to be quieter this year. These businesses were typically in finance, wholesale, manufacturing and construction.
Report author Christena Singh says those operating in the business-to-business services sector will experience a particularly sharp slowdown as many of their clients shut up shop over the Christmas break.
She says the Christmas trading period is typically more active for customer-focused sectors like retail, hospitality, accommodation and personal services.
“This Christmas period is set to further polarise conditions for Australian businesses, with some sectors and states expecting bumper conditions, while others face the Christmas Grinch,” she says.
“However, one in five businesses are taking proactive steps to manage conditions by increasing advertising, adding new products and services, introducing sales promotions, increasing staff, as well as extending trading hours and making contact with their client base.”
Singh says start-ups should keep a close watch on their competitors’ activities and have a clear understanding of the economic conditions in their local area.
“Make sure you make the most of your opportunities by ensuring your advertising is targeting where the demand might be in your sector,” she says.
Another trend that emerged from the survey was that just over half of businesses are planning a staff Christmas party this year, and only one in 10 is planning a party for their clients.
Singh attributes the low numbers to weak business conditions, saying many businesses can’t justify the cost of a party.
However, she says start-ups should look at holding both kinds of parties, particularly one for their clients.
“It’s a chance to network with your customers… Having strong customer relationships is the key reason behind business confidence so start-ups should certainly look at building those relationships,” she says.