Small and Medium Enterprises (SMEs) have enjoyed an increase in overall confidence, offsetting previous downturns this year, according to the new Sensis Business Index survey.


Sensis surveyed 1,800 businesses across a range of sectors in the economy, finding that the proportion of businesses who felt that the economy would be better in a year's time rose 8 percentage points.


The survey also showed a renewed growth in SME profitability during the September quarter, but has remained a net negative overall.


Anticipated improvement in sales and profitability and the increase in confidence levels about the year ahead was tempered by increasing concerns about a potential lack of work or sales, along with reservations about the current economic climate.


Report author Christena Singh said that while there were early signs of improvement in ‘recovery’ indicators such as sales growth and profitability, there remained some uncertainty amongst SMEs about the immediate future.


“There is clearly increasing confidence surrounding the longer term outlook, but it should be pointed out that certain concerns remain about shorter-term business conditions,” Ms Singh said.


In other results for the past quarter:

  • Sales performance was up six percentage points from the previous quarter;
  • The employment indicator improved four percentage points on the previous quarter;
  • There was a strong decrease in the proportion of SMEs reporting increased wages, down seven percentage points on last quarter;
  • Seventeen per cent of small businesses reported increasing prices in the past quarter, down three percentage points on last quarter;
  • The proportion of small businesses reporting capital expenditure growth increased six percentage points in the past quarter
  • Perceptions of the current state of the Australian economy fell further, and are now 17 percentage points lower than at the same time last year;
  • Small business recorded higher performance than medium businesses for wages, prices and capital expenditure, however medium business recorded higher performance for sales, employment and profitability;
  • Metropolitan businesses were significantly more confident than their regional counterparts, with confidence now five percentage points higher in metro areas;
  • Confidence was lowest in the manufacturing sector, with businesses concerned about decreasing business and a downturn in the industry;
  • The largest decrease in confidence was in the building and construction sector, with slow business and difficult conditions being cited by the sector.