Sensis reveals increased optimism from small business

- October 15, 2020 3 MIN READ
business confidence

Things are on the up for Australia’s businesses according to the findings of Sensis latest Business Index.

Businesses showing optimism for the future

The monthly survey of business owners and managers from around the country found the small business sector is feeling far more optimistic about the future.

Twenty-two per cent of Sydney businesses are Extremely Confident about the next six months, almost double the confidence levels of September (12 per cent) While even Melbourne’s businesses which have suffered the worst from lockdown restrictions have seen an increase in confidence from nine to 16 per cent. Confidence was also up in Brisbane – now 15 per cent compared to 7 per cent – and Adelaide up from 11 per cent to 17 per cent.

Industry sectors show mixed results

Of the 10 industry sectors surveyed by Sensis, seven showed improved optimism in regard to being extremely confident about the next six months but three sectors were less optimistic – Retail, Manufacturing and Wholesale.

The biggest turnaround came from the Culture and Recreation sector with 19 per cent of businesses in the industry saying they were Extremely Confident about the future. Just a month ago the figure was a scant 5 per cent.

The Communications sector was up more than double from 8 per cent to 19 per cent, Finance and Insurance up from 10 per cent to 19 per cent and Transport also doubled, from 6 per cent to 12 per cent.

Sensis CEO John Allan said that across the board there has definitely been an increase in optimism.

“Overall the sentiment has changed significantly for the good in a very short period of time,” he said. “The retail, manufacturing and retail industries continue to suffer from low confidence levels when other industries saw a significant improvement on last month”.

Extremely confident14.4%15.8%18.9%12.2%15.2%14.3%14.4%
Fairly confident41.9%26.7%42.1%46.9%34.8%55.7%41.9%
Fairly worried15.6%21.8%12.6%16.3%21.2%7.1%14%
Extremely worried6.5%6.9%5.3%6.1%10.6%8.6%2.3%

Signs of optimism for national economy

While last month 56 per cent of businesses believed the economy would be worse in a year, this month there is slightly less pessimism. Less than half of those surveyed (47 per cent) believe Australia will be worse off in a year while almost a quarter (23 per cent) now believe thing will get better.

“There are some optimistic signs out there. Every state had a drop in the number of businesses that thought the national economy would be worse in 12 months,” said Allan.

“Despite this easing, the number of businesses that expect the national economy to be worse were still high; headed by Canberra with 64 per cent of businesses believing the economy will be worse in 12 months.”

The impact of border closures

“There has been a lot of political talk about the closure of borders but just one in five (19 per cent) of businesses said the closures were having a major impact on their business,” Mr Allan said. “40 per cent said the border closures were having somewhat of an impact and 41 per cent said it was having no impact at all.”

Regional areas were less affected with 47 per cent saying the closed border had no impact compared to 38 per cent in metropolitan areas.

The border closures were having the biggest effect on Melbourne businesses with nearly one in three (29 per cent) saying it is having a major impact. They were closely followed by Canberra at 28 per cent. In comparison, it was a major issue for only 13 per cent of businesses in Sydney and Brisbane and just 9 per cent in Hobart.

As expected, the border closures are affecting the Hospitality sector the hardest with 59 per cent saying it was having a major effect. That was more than double the next highest sector – Transport at 26 per cent. Retail was at 20 per cent saying the border closures were having a major effect.

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