The December Quarter 2018 Sensis Business Index has revealed that SME confidence across the country has reached a nine-year high.
The report, which measures SME activity, expectations and confidence over a three-month period, found confidence levels increased eight points to +50, the highest level recorded since December 2009, with Victoria claiming the top spot, due to a post-election surge to +55 (14 points higher than the September Quarter report).
Metropolitan SMEs were once again found to be more confident than their regional counterparts, recording balances of +58 and +38 respectively. Overall, prospects for the year ahead were also strong particularly in sales, with over 40 per cent of SMEs expecting growth in this area to indicate a rewarding 2019 ahead.
Sensis Chief Executive Officer, John Allan, said, “It’s great to see over 64 per cent of small- and medium- business owners report they feel confident in their business prospects, particularly as the survey was completed as they headed into the Christmas period.”
The report also showed that expectations for 2019 were positive across the majority of business indicators, which Allan noted as extremely encouraging given the disruption of the coming Federal Election.
At an industry level, Hospitality was found to be the most confident sector, recording a massive increase of 36 points to a record high index of +71. While Retail remained the least confident (+26), it recorded an increase of 14 points which indicates the sector maintained positivity ahead of its busiest period.
When looking at views of the Federal Government, SMEs made it clear they don’t feel their business is affected by decisions made in Parliament, with 62 per cent reporting Federal policies had no impact on their business – increasing from 57 per cent in the previous quarter.
Allan added, “The perception that Federal Government policies do not affect small and medium businesses has grown in popularity over the years among SMEs, which could suggest they are becoming increasingly resilient toward Government changes.”
Despite growth in sales predictions, perceptions of the economy continued to fall for the third quarter in succession, with 61 per cent feeling they will see no change in the economy in 12-months’ time.
“It is interesting to highlight that SMEs are more confident in their own sales over the next 12-months than they are in the Australian economy and we hope to see businesses maintain this confidence throughout 2019,” Allan said.