Small businesses have started 2018 in an optimistic mood, which has resulted in them lifting their level of investment, working hours and employment.
The Westpac-Melbourne Institute small and medium-sized enterprises index, released on Monday, rose for a third consecutive quarter, gaining 1.3 per cent in the March quarter to 103.2 points.
“The increasingly positive outlook is particularly notable given the shaky start to 2018 that included renewed volatility in global financial markets,” Westpac senior economist Matthew Hassan said.
Hassan said that, while Westpac expects the economic backdrop to remain fairly lacklustre this year, so far SMEs appear to be sticking to a more positive view.
The survey found two in five SMEs have increased their investment levels in the past year, while a third have lifted their working hours and 20 per cent have expanded their workforce.
Westpac general manager of SME business banking, Ganesh Chrandrasekkar, said the bank is being told by its customers that consumer behaviour is changing through technology, and they are facing increased competition and margin pressures.
“However, businesses remain upbeat and see these changes as an opportunity to make investments in things like online marketing to take advantage of these trends,” Chrandrasekkar said.
“Overall, SMEs are better positioned despite flat consumer confidence and local and global volatility.”