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According to the latest Sensis Business Index, 87 per cent of Australia’s small and medium businesses now think the economy is either slowing (35 per cent) or standing still (52 per cent), while only 13 percent think it is growing.
John Allan, Sensis Chief Executive Officer said “More than three times as many businesses think the economy is slowing as those who think it is growing. The projections for the economy in a year’s time have also deteriorated by 13 points, moving from positive to negative territory.”
The Index, which shows the views of 1,000 small and medium businesses from across Australia, also showed that support for the Federal Government remains relatively strong at +6, after falling one point on a net basis.
“The Government’s rating is currently 14 points better off than it was at this time last year, placing it in a good position with small and medium businesses as we possibly head to an early election.
“The halo effect of the new Prime Minister seen last survey appears to have now evaporated however. In the December survey eight percent of SMBs spontaneously mentioned the new Prime Minister as having a positive impact on their perceptions, but that figure is now less than one percent.
New South Wales has overtaken Tasmania to be the most confident region in Australia, while South Australia went further backwards and remains in last place.
“The results were mixed this quarter with New South Wales, the ACT, Victoria and the Northern Territory showing slight improvements, while the other states saw declines. The biggest fall occurred in Western Australia where the deteriorating business environment was behind a 20 point fall in confidence.
“The Tasmanian Government is now the most popular in Australia, with SMBs there happy with the Government’s efforts to reduce bureaucracy and red tape. The South Australian Government saw the biggest improvement this quarter but despite this it remains the least popular in the nation,” said Mr Allan.
There was a reversal in confidence in the Northern Territory, with businesses in Darwin (+32) now more confident than those in regional areas (+23). Meanwhile, businesses in regional Victoria closed a 13 point gap to now be as confident as those in Melbourne, both on +39.
The sector results were varied, ranging from a 12 point rise in confidence in wholesale trade, to a 20 point fall in the building and construction industry. The health and community services sector lost some ground but remains comfortably in top spot.
The transport and storage sector experienced the worst conditions for both sales and wages. This saw the sector fall eight points in terms of confidence to now sit in last place.