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Small to medium-sized businesses remain pessimistic about the Australian economy with almost half expecting further downfall in the year ahead.
The result’s released today in MYOB’s national Business Monitor Survey show that, from the 1,000 small to medium-sized business owners surveyed, 42 percent believe the economy will decline over the next 12 months and only 24 percent are optimistic about the country’s economic future.
“The latest MYOB Business Monitor clearly shows many SME operators are still concerned about the underlying strength of the Australian economy,” said MYOB CEO Tim Reed.
Since the last survey in October 2015, business conditions have been in steady decline for Australian small to medium-sized businesses have held steady yet most owners still feel that the economic outlook is bleak. This is also despite Federal Budget measures and Federal election promises of greater support for the sector.
Small businesses also expect revenue to remain steady over the next 12 months, but the survey found that sales in the pipeline for the coming three months are to deteriorate, showing a short term concern.
“The pessimistic SME sentiment revealed in the MYOB Business Monitor should be a wakeup call for all politicians who care about this vital sector as we approach the federal election. It reinforces the need for policies that will stimulate the economy and lead to growth,” said Reed.
“Despite a range of election initiatives promised to help businesses get ahead, business owners still don’t feel confident that the economy has turned the corner.”
“We had been looking for signs of improvement, but the gloomy sentiment has now been consistent over the past three MYOB Business Monitor surveys. Uncertainty from the election may be contributing to this unease.”
Over the next 12 months, two in five owners expect their revenue to remain the same while one in three expect their revenue to increase. Businesses with a strong social media presence or a business website expect their revenue to increase over the next 12 months.
Since the last survey, there has been a small drop in the number of owners reporting that they had more work or sales in the pipeline, with the number falling from 38 percent to 34 percent.
“The findings show an overall decline in work or sales in the pipeline for the April-June quarter,” said Reed.
“This could be down to a number of reasons including election uncertainty.”
“This indicates a certain level of trepidation and validates the concern many business owners are showing about a possible downward trend in the Australian economy,” he said.
Operating a small to medium-sized business brings a number of stresses and challenges and the top five business pressures have stayed consistent, although the order has changed.
When asked about their biggest business pressures for the next 12 months, cash flow concerns have increased from 22 percent to 26 percent, up from fourth place on the list to the number one pressure point.
The other issues pressuring small to medium-sized businesses are competitive activity and fuel prices, both down from equal second place. Meanwhile, attracting new customers is down from first place, and profitability and price margins equal fifth place in the last survey.
“It is particularly interesting that interest rates have jumped from tenth place to equal fifth place on the list of business pressures,” said Reed.