The recently released March Quarter 2019 Sensis Business Index revealed Australian small and medium enterprise (SME) confidence fell significantly across the country during the first quarter of the year as concerns about the health of the economy grew.
The report, which measures SME activity, expectations and confidence over a three-month period, found small and medium business (SME) confidence levels decreased 16 points to +34, its lowest level since March 2016.
Perceptions of the current state of the economy continued to decline, this time decreasing by eight points to -4, the first negative balance recorded since June 2015 with 26 per cent of SMEs believing the economy is slowing and 52 per cent believing it is standing still.
Speaking to the results, Sensis Chief Executive Officer John Allan said, “The March Quarter Sensis Business Index report has revealed mixed results on the level of support for the Federal Government in the lead up to the election. On the one hand, Small and Medium Business ratings of the Federal Government reached one of the highest levels recorded in the last 10 years with 26 per cent supportive but on the other, overall business confidence fell significantly with concern about the strength of the economy.”
South Australia bucked the national confidence trend, reaching an all-time high confidence level of +56 (increasing five points from last quarter), while Tasmania remained unchanged at +43. Falls were recorded in all other states and territories. The largest fall was recorded in WA, dropping 32 points to +20, followed by Victoria (down 24 points to +32) and Queensland (down 23 points to +32). Despite declines, ACT and NSW remained above the national average at +45 (down 1 point) and +35 (down 7 points) respectively.
The opinion of the state government was measured as positive by five state or territory governments. Tasmania rated highest (down three points to +26), followed by SA (up two points to +19), Victoria (up eight points to +8), NSW (up one point to +3) and WA (up six points to +1). The lowest rating was again recorded in Queensland (down four points to -23) while the largest fall was experienced by the ACT Government (down 17 points to -19). The balance was also lower in the NT (from -2 to -5).
Access to finance was again a major concern for SMEs as the net balance for accessing finance decreased seven points to -28, compared with +1 last March, as tightened lending regulations continue to bite. The last time SMEs believed it was this difficult to access finance was in March 2012 when the net balance was -29.
“Small and medium business’ ability to access finance is critical for capital expenditure and growth,” said Allan. “Fewer SMEs attempted to access finance during the March 2019 quarter than in December, with the majority believing this to be the most difficult time to access finance in the past seven years.”