Small busing trading conditions have continued to deteriorate in September quarter, with key indexes entering deep contractionary territory, according to the latest Small Business Survey published by the Australian Chamber of Commerce and Industry (ACCI).


The ACCI expects trading conditions to continue to worsen further over the coming months amid rising input costs, subdued consumer demand and looming global economic uncertainties.


The key findings of the report are:

  • The small business sector has become increasingly pessimistic about the strength of the Australian economy over the coming year, with the index of Expected Economic Performance edging lower from 40.6 to 38.8 during the September quarter, to be 2.3 points lower through the year;
  • Profit Growth slid deeper into contractionary territory, while Selling Prices declined to its new historical low of 44.7, 1.3 points below the low reading of 46.0 previously recorded in June 2009. Small businesses expect profits and selling prices to continue to fall in the December quarter;
  • Wage Growth and Non-Wage Labour Costs rose further in September, defying the declining trend reported in a broad range of indicators elsewhere in the Survey; and
  • Business taxes and government charges continued to constitute the top barrier to investment for small businesses for the seventh successive quarter in the quarter.


ACCI’s Chief Economist, Greg Evans said that the survey shows that conditions remain challenging for small businesses, with revenue, profit growth and investment all approaching historic lows.


"Small businesses have become increasingly concerned that labour costs have continued to rise and remain elevated, despite all other trading indicators trending lower in recent months. Lack of pricing power as manifested by the historical low Selling Prices has dented small business profits and its ability to employ and investment,” Mr Evans said.


The Survey assessed business conditions and business confidence amongst 1,643 small businesses around the country over the July, August and September period.