Business confidence appears to be on the rise reflected by recent Colmar Brunton research findings
April 5, 2013
The economic confidence and overall business outlook of small to medium business operators (SMEs) is finally on the rise, according to research commissioned by accounting software provider MYOB.
The March 2013 MYOB Business Monitor – the latest round of a national study that has run since 2004 – found over one-quarter of SMEs expected the domestic economy to improve within 12 months (26 percent), increasing by seven percentage points from the July 2012 report (19 percent).
The Monitor, which is independently commissioned to Colmar Brunton, researches business performance, attitudes and plans over time. In the latest study of 1,005 Australian business owners and managers, the proportion expecting an economic improvement to take one to two years is now 37 percent, down from 42 percent. Those who think it will take more than two years is now 22 percent, down from 24 percent.
This positivity was echoed in the expectations of revenue results for 2013. Overall, 30 percent were anticipating a revenue rise, 42 percent expected revenue to be stable, 19 percent expected a fall and 10 percent weren’t sure.
MYOB CEO Tim Reed says he is happy to see 72 percent of SMEs expect increased or stable revenue this year.
“Considering only 58 percent saw that occur last year, it indicates hope is springing back for Australia’s business coalface,” Reed says.
“We highlighted our expectation of a rise in economic confidence amongst SMEs around the time of the December cash rate cut when we conducted a retrospective analysis of the last five Business Monitors.
“I’m pleased to see small and medium businesses are feeling more assured of an upturn.”
Reed says, however, that 19 percent of survey respondents expect revenue to fall.
“Our advice to them is to seek assistance from a business mentor, coach or advisor such as an accountant.
“Draw on their expert knowledge accumulated through years of experience working with other businesses. There’s a lot to be gained from the lessons learned by other businesses and their tactics to combat pressures.”
SUBHEAD: MANUFACTURING HIT, OPERATORS STEADY
While two-fifths of respondents reported steady revenue when asked to look back over the past year (40 percent), manufacturing and wholesale industries were hit hardest with 52 percent experiencing a revenue fall.
The finance and insurance industry was the most likely to see a rise (29 percent) while the transport, postal and warehousing industry was the most likely to see steady revenue (49 percent).
Of the mainland states, Queensland and Western Australia were most likely to see a rise (22 percent). Western Australia was also the least likely to report a loss (32%), but the largest states by population, New South Wales and Victoria, had the highest proportion that saw a revenue fall (40 percent). South Australians were most likely to have steady revenue (45 percent).
Reed says Western Australian businesses recorded the best results, with almost two in every three seeing steady or rising revenue despite increasing talk of the mining sector slowing.
“Successful Australian business owners are known for digging deep, embracing change and adapting,” says Reed.
“They find opportunities in the challenges. Leveraging new technologies, new organisational structures and better systems could help our independent businesses improve their operational and financial performance.”