business index march 2016 · 2018-05-29 · interviewing was conducted from january 18 to february...

SensisBusiness Index March2016A survey of confidence and behaviour of Australian small and medium businesses

Released 7 April 2016

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Sensis Business Index | Small and medium businesses1

Sensis Business Index | Small and medium businesses

Table of contentsIntroduction ...............................................................................................................................................................................................2

About the survey ........................................................................................................................................................................................................................................ 3

Foreword ......................................................................................................................................................................................................................................................4

Executive summary .................................................................................................................................................................................................................................... 5

SMB business cycle analysis .....................................................................................................................................................................................................................7

SBI snapshot ............................................................................................................................................................................................................................................... 8

Small and Medium Business Outlook – National Summary ................................................................................................................10

SMB confidence in their own business prospects over the next 12 months ....................................................................................................................................... 11

Confidence by state and territory, sector and size .................................................................................................................................................................................12

Perceptions of the economy ....................................................................................................................................................................................................................14

Concerns ....................................................................................................................................................................................................................................................15

Sales ...........................................................................................................................................................................................................................................................16

Employment ...............................................................................................................................................................................................................................................17

Wages bill ...................................................................................................................................................................................................................................................18

Prices ..........................................................................................................................................................................................................................................................19

Profitability................................................................................................................................................................................................................................................20

Access to finance.......................................................................................................................................................................................................................................21

Government Policies ...............................................................................................................................................................................22

Government policies ................................................................................................................................................................................................................................ 23

Assessment of Federal Government policies ........................................................................................................................................................................................ 24

Assessment of state and territory government policies ...................................................................................................................................................................... 25

Small and Medium Business Outlook ...................................................................................................................................................26

National ..................................................................................................................................................................................................................................................... 27

New South Wales .....................................................................................................................................................................................................................................28

Victoria ...................................................................................................................................................................................................................................................... 29

Queensland ...............................................................................................................................................................................................................................................30

South Australia ..........................................................................................................................................................................................................................................31

Western Australia ..................................................................................................................................................................................................................................... 32

Tasmania ................................................................................................................................................................................................................................................... 33

Northern Territory ..................................................................................................................................................................................................................................... 34

Australian Capital Territory ...................................................................................................................................................................................................................... 35

Industry Snapshots .................................................................................................................................................................................36

Manufacturing .......................................................................................................................................................................................................................................... 37

Building and Construction ....................................................................................................................................................................................................................... 37

Wholesale Trade .......................................................................................................................................................................................................................................38

Retail Trade ...............................................................................................................................................................................................................................................38

Transport and Storage .............................................................................................................................................................................................................................39

Communication, Property and Business Services .................................................................................................................................................................................39

Finance and Insurance .............................................................................................................................................................................................................................40

Health and Community Services .............................................................................................................................................................................................................40

Cultural, Recreational and Personal Services .........................................................................................................................................................................................41

Hospitality (Accommodation, Cafes and Restaurants) ..........................................................................................................................................................................41

Sensis Business Index | Introduction2

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IntroductionThe Sensis Business Index is a quarterly survey of Australia’s small and medium businesses (SMBs) which commenced in 1993 to measure and track:

• SMB business activity over the last three months.

• Expectations for the current quarter.

• Overall confidence among SMBs.

The Sensis Business Index samples SMBs nationally enabling broad scrutiny of this market and relevant trends and issues. It examines differences by location, business size and industry. The aim is to reflect the attitudes and behaviour of SMBs, which comprise some 99% of Australian businesses.

Results are based on the responses of SMBs surveyed and reported as a net balance, which represents total positive responses minus total negative responses.

The Sensis Business Index is an initiative of Sensis as part of its commitment to this vital business sector. As Australia’s #1 marketing services company, we’re here to engage consumers with Australian businesses. We make this happen through a number of leading brands - Yellow Pages, White Pages, True Local, Whereis and Skip and our expert digital know-how. Our digital expertise is what sets us apart - we give businesses a competitive edge through websites, search engine marketing and optimisation, data, and through our digital advertising agency, Found.


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The Sensis Business Index March 2016 is based on 1,000 telephone interviews conducted with small and medium business proprietors or managers, respectively employing less than 20 and 20-199 people.

This sample is drawn from metropolitan and major non-metropolitan regions throughout Australia with targets set for location and industry as shown opposite. Interviewing was conducted from January 18 to February 15, 2016. TKW is responsible for sampling and fieldwork and Di Marzio Research for analysis and reporting.

Results for each survey are weighted so the sample is reflective of the total SMB population. Prior to 2015 the weighting was by selected ANZSIC (industry sector) divisions within the metropolitan and non-metropolitan region of each state and territory as per the Australian Bureau of Statistics (ABS) Business Register of June 1998. Now the weighting is also by industry, location and business size but based on the most current ABS data contained in the publication 8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2009 to Jun 2013. Some adjustments to this weighting data were also made by Sensis to exclude firms with a turnover of under $50,000 per annum which are primarily made up of non-operating and non-employing firms.

This report covers experiences over the last quarter and expectations for the current quarter. Year ahead expectations are asked in the December quarter survey.

About the survey

Total Metro Regional

New South Wales 168 108 60

Victoria 171 110 61

Queensland 171 91 80

South Australia 125 90 35

Western Australia 125 90 35

Tasmania 80 40 40

Northern Territory 80 40 40

Australian Capital Territory 80 80 -

Total 1,000 649 351

Location of business

Industry sector

Business location

65% Metro

35% Regional

Manufacturing 106

Building and Construction 155

Wholesale Trade 60

Retail Trade 137

Hospitality (Accommodation, Cafes and Restaurants) 52

Transport and Storage 68

Finance and Insurance 81

Communication, Property and Business Services 176

Health and Community Services 80

Cultural, Recreational and Personal Services 85

Total Businesses 1,000

90% Small

(1-19 employees)

10% Medium

(20-199 employees)

Business size

OPEN OPEN


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Business confidence has dipped slightly in the first quarter of 2016, but it remains at the second highest level observed since December 2013.

Sensis talks to 1,000 small and medium businesses every quarter about their business confidence, perceptions of the economy and attitudes to their relevant state, territory and federal governments.

The results were very mixed this survey, with five states or territories seeing a gain in confidence and four experiencing a decline. New South Wales is now just ahead of Tasmania as the most confident state, while Western Australia was the biggest mover, dropping 20 points to now sit in second last spot. Despite some positive signs last quarter, South Australia has again gone backwards and remains in last position.

A lack of work or sales again dominated as the main concern among businesses and, despite a slight improvement, half are still facing barriers to taking on new staff.

Also impacting on sentiment were the experiences of SMBs in terms of sales, employment and profitability, with these indicators all posting negative net balances. Wages and prices remained in positive territory however and the expectations for the quarter ahead are all positive.

The industry sectors also had mixed results. The biggest mover was the building and construction sector, which dropped 20 points in confidence. Despite a slight decline, the health and community services sector is again easily the most confident. Transport and storage is now on the bottom after posting the worst sector results for sales, wages, prices and profitability.

The Federal Government saw a boost in support from SMBs last quarter following the change in Prime Minister to Malcolm Turnbull. The impact of that change appears to have now evaporated. Whereas eight percent of SMBs mentioned the new PM as influencing their positive perceptions of the Government last quarter, that figure is now less than one percent and we’ve seen the net balance drop by one point. Despite this, the Government sits in a fairly strong position in terms of business sentiment as we head towards a possible early election.

While business confidence remains relatively strong, perceptions of the economy have deteriorated. Every state and territory now has a negative perception of the economy, ranging from a net balance of -2 in the ACT to -46 in Western Australia. In the Northern Territory, only two percent of businesses believe the economy is growing, with the NT posting the worst results nationally for sales, employment and profitability.

It will be interesting when we talk to SMBs next quarter to hear their views on the Government’s plans for a possible double dissolution election. Please let us know how your business is currently fairing and your views on the Government policies impacting your business using #SensisBiz.

John Allan, Chief Executive Officer, Sensis

Foreword


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Historical trends and overall SMB highlights

SMB confidence was lower but still at a comparatively high level overall. The economy was perceived to be weakening which made the latest quarter more challenging than had been anticipated. There are also more negative views about the economy for the coming year. However, this has not stopped SMBs expecting better performances this quarter on all key performance indicators, especially among well-established firms and those claiming to have particular business strengths.

The key findings of the Sensis Business Index March 2016 are:

• SMB confidence was four points lower but remained relatively strong at net +35. This compares with +27 a year ago.

• Higher confidence was seen in NSW (up two points to +48), Victoria (up one point to +39), the NT (up three points to +27) and the ACT (up two points to +40). It dropped by 17 points in Tasmania to +47, but this is still the second best score nationally. The biggest fall was in WA which saw a 20 point drop to +11. Confidence was also down by five points in Queensland to +30, and by 11 points in SA to +5.

• Opinions of the current state of the economy deteriorated and became even more negative. More SMBs still believe the economy is slowing (35%) than those who think it is growing (13%). They are also less enthused about the health of the economy in 12 months’ time with the net balance moving into negative territory (+7 to -6).

• Last quarter, sales and profitability balances became more negative and employment moved into negative territory.

• However, for this quarter all indicators are expected to be positive and to a greater degree than last time by between two and nine points. Sales (+25) and profitability (+18) expectations are respectively nine and eight points higher than last survey.

• Lack of work or sales is still restricting employment growth much more than barriers such as the economy and competition.

• Overall opinion of the Federal Government has remained positive at +6 (was +7). Tax and other incentives are the major attraction while excessive bureaucracy and red tape are the major criticisms spontaneously mentioned.

• As with the last survey, the state and territory governments of NSW (+8), Tasmania (+14) and the ACT (+9) are the only ones assessed favourably overall by SMBs. However, of those three, only the Tasmanian Government gained further support, while the ACT and NSW Governments became slightly less popular. The other state and territory governments are well behind these three even though some did generate less negative ratings this survey.

Executive summary


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Metropolitan versus regional

Confidence was lower among metropolitan SMBs and increased slightly in regional areas. Despite this, performance expectations are more optimistic in metropolitan areas.

Key findings relating to metropolitan and regional businesses included:

• Confidence decreased by seven points in metropolitan locations but was two points higher among regional SMBs. The gap between them reduced from 15 to six points (+37 versus +31).

• Metropolitan and regional SMBs are equally pessimistic about the current state of the economy (-22). However, metropolitan SMBs are not quite as negative about the economy in one year’s time (-4 versus -8).

• On all five key performance indicators metropolitan SMBs recorded higher net balances than regional SMBs in the past quarter but neither set of results were impressive.

• For the current quarter, there were positive expectations for all indicators in both metropolitan and regional locations but the net balances are distinctly higher in metropolitan areas. This can be seen clearly in the sales (+30 versus +16) and profitability (+21 versus +12) forecasts.

• Metropolitan and regional SMBs still hold similar opinions of the Federal Government’s policies for small business. Their net balances are the same at +6 (previously +7 in both cases).

Executive summary

Industry sector trends

The last quarter proved difficult but all sectors other than transport and storage expect better results in the short term. The health and community services sector continues to be the most confident.

• The health and community services sector remains the most confident and is well ahead of the rest. Above average confidence was also displayed in wholesale trade; cultural, recreational and personal services; communication, property and business services; hospitality; and finance and insurance. Confidence is comparatively low in retail trade; manufacturing; and transport and storage. Building and construction is not far below average.

• Sales performances last quarter ranged from flat to weak with hospitality being the sole exception with a net balance of +15. Transport and storage (-17) found the selling environment particularly tough.

• Profitability results were negative last quarter in all sectors except cultural, recreational and personal services (+9). Manufacturers (-30) struggled the most with profitability, followed by transport and storage (-22).

• For the current quarter, no negative net balance expectations emerged for any of the five performance indicators by sector. Sales and profitability expectations are generally positive with the exception of transport and storage where they are very modest. Sales conditions appear very promising for communication, property and business services (+42) and cultural, recreational and personal services (+39).


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SMBs would be generally disappointed about the last quarter especially given buoyant expectations recorded in the prior survey. Despite this, and deteriorating faith in the economy for 2016, they generally anticipate good short term performances.

Examining the latest key indicator results provides a gauge on the potential direction of the Australian economy.

It is hard to believe that the SMB performance results in the last two quarters and their views of the economy could inspire much confidence about their prospects but optimism is not in short supply. The Federal Government remains favourably viewed and that is potentially a contributing factor. It is clear that many SMBs are resilient and believe strongly in themselves. Being an established, solid business and having specific strengths plays a major role and this underpins the critical impact that SMBs could have on the nation’s economic health over the next year.

SMB business cycle analysis

Results for this quarter

Expectations for next quarter

Expectations for next 12 months

Business Confidence

NA NA Slightly lower but still quite optimistic

Economy More negative NA More pessimistic

Sales Flat More optimistic NA

Employment Lower and now negative

More optimistic NA

Wages Marginally more positive

Marginally more optimistic

NA

Prices Unchanged, still positive

More optimistic NA

Profitability More negative More optimistic NA


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SBI snapshot

Tasmania +47 ( 17)

+35 net balance- =55% feel confident

Because of:• Established, solid business• Specific business strengths• Healthy, growing sales

20% feel worried

Because of: • Decreasing sales• Unfavourable business, economic and industry environment

Decreased 4 points from last quarter

65%Metro

35%Regional

90%Small

10%Medium

SBI SnapshotThe Sensis Business Index has tracked the confidence and behaviourof Australia’s small and medium businesses (SMBs) since 1993.Here are some of the key findings of the latest report.

Who did we survey?

What did they tell us?

Region

SMBs feeling confident

Business size

OPENOPEN

Net confidence decreased to

Down 4 points from last quarter

points+35SMB confidence by state

Western Australia +11 ( 20)

Queensland +30 ( 5)

Northern Territory +27 ( 3)

South Australia +5 ( 11)

New South Wales +48 ( 2)

National average +35 ( 4)

Australian Capital Territory +40 ( 2)

Victoria +39 ( 1)

9

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Better+20%

Same+54%

Worse+26%

Slowing+35%

Growth+13%

Standing Still+52%

Health and Community Services +59 ( 6)

Perceptions of the economy now

5 points lower than last quarter

Perceptions of the economy a year from now

13 points lower than last quarter

SBI Snapshot

-22Net balance

-6Net balance

SMB confidence by sector

Cultural, Recreational and Personal Services +43 ( 1)

Hospitality (Accommodation, Cafes and Restaurants) +41 ( 3)

Building and Construction +27 ( 20)

Manufacturing +21 ( 6)

Retail Trade +21 ( 2)

Wholesale Trade +42 ( 12)

Communications, Property and Business Services +48 ( 10)

National average +35 ( 4)

Finance and Insurance +39 ( 1)

Transport and Storage +16 ( 8)

Experience and expectations on key business indicators

* Net balance is defined as the difference between the percentage reporting an increase and the percentage reporting a decrease.* Actual experience relates to the last 3 months. * The expectation results are for the next 3 months. For the first three surveys of the year the expectation results relate to the next 3 months but the final survey also asks about the next 12 months and the capital expenditure indicator

*Net Balance for Key Indicators Actual experience** Expectation for next 3 months***

Change in expectation for next 3 months

Sales -2 +25 ↑9

Size of workforce -3 +11 ↑6

Wages +9 +13 ↑2

Prices +9 +19 ↑5

Profitability -11 +18 ↑8

10

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10

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Sensis Business Index | Small and medium business outlook – national summary

Small and Medium Business Outlook – National Summary

SMB confidence in their own business prospects over the next 12 months ............................................................................. 11

Confidence by state and territory, sector and size ..........................................................................................................................12

Perceptions of the economy .................................................................................................................................................................14

Concerns ................................................................................................................................................................................................. 15

Sales .......................................................................................................................................................................................................... 16

Employment .............................................................................................................................................................................................17

Wages bill ................................................................................................................................................................................................. 18

Prices ....................................................................................................................................................................................................... 19

Profitability ..............................................................................................................................................................................................20

Access to finance ...................................................................................................................................................................................21

11

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SMB confidence in their own business prospects over the next 12 months

Net confidence has eased but remains relatively strong.

Key findings

The net confidence level of Australian SMBs declined slightly after reaching the highest level in almost five years last quarter.

Last quarter

The net balance figure was four points lower at +35 with 55% of SMBs feeling confident about their prospects for the year ahead and 20% feeling worried. This is still the second highest confidence level observed since December 2013 when the net balance was +38.

Lack of work and sales remain the most common concern.

Consistent with past surveys, the primary drivers of confidence are being an established or solid business, having specific strengths and healthy, growing sales.

Three key indicators provide an overall assessment of SMB confidence levels:

• Business confidence.

• Current perceptions of the Australian economy.

• Future expectations for the Australian economy.

This quarter SMB views on the current state of the Australian economy have worsened and remain negative overall. Their expectations for future economic growth have also declined quite markedly, moving from positive to negative territory.

Small Business (up to 19

employees)

Medium Business (20 - 199

employees)

Total Small and Medium

Extremely confident 12 7 11

Fairly confident 43 53 44

Neutral 25 18 25

Fairly worried 15 17 15

Extremely worried 5 5 5

Total confident 55 60 55

Total worried 20 22 20

*Net Balance +35 +38 +35

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

Confident 49% 51% 50% 57% 55%

Worried 22% 20% 23% 18% 20%

*Net Balance +27 +31 +27 +39 +35

Overall confidence - Mar 2016

Confidence trends - past five quarters

Thinking about the next 12 months, how confident do you feel about your business prospects?

100%

50%

0%

Confident Worried *Net balance

Long term trends in confidence

* Net balance is defined as the difference between the percentage who are confident and the percentage who are worried.

Note: rounding occurs

Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

Mar

16

55%

+35

20%

12

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Confidence by state and territory, sector and size

Confidence shifted both up and down across the nation but remained solid in most locations.

Key findings

Confidence rose slightly in four states and territories but fell elsewhere. NSW improved for a fourth consecutive quarter with marginal increases observed in Victoria, the NT and the ACT. NSW, Victoria, Tasmania and the ACT remain above the national average but confidence in Tasmania fell significantly, albeit from a very high level. WA is less confident than at any time in the last year with SA still clearly bottom of the pack. Confidence also fell in Queensland.

Confidence declined in metropolitan areas but was a little higher in regional areas. The gap between the two reduced from 15 to six points. Regional areas in South Australia and Western Australia are more confident than their metropolitan counterparts. All sectors remain relatively confident but some large differences exist. Small firms are slightly less confident than medium sized firms.

Last quarter

Tasmania’s net confidence fell from +64 to +47, which is still the second best score by only one point. NSW improved by two points to now be the most confident on +48. The ACT was up two points to +40 and Victoria was up one point to +39 and sits above the national average. The NT was also up three points to +27 but remains below the national average.

WA declined by 20 points to +11 and SA by 11 points to +5, while in Queensland net confidence was down from +35 to +30.

Capital city confidence is still very strong among SMBs in Hobart and Sydney while those in Melbourne, Brisbane and Canberra exceed the national average. In Adelaide and Perth net confidence is barely positive. Regionally, confidence was again strongest in Tasmania with Victoria close behind. Confidence remains low in SA and below average in the NT.

Confidence remained easily the highest in the health and community services sector with communications, property and business services; finance and insurance; cultural, recreational and personal services; wholesale trade; and hospitality above the national average. Confidence is relatively low in manufacturing; retail trade; transport and storage; and building and construction.

Medium sized businesses became more positive (up four points to +38) about their prospects while small businesses lost some confidence (down four points to +35).

13

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Confidence by state and territory, sector and size

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

National +27 +31 +27 +39 +35

New South Wales +38 +31 +34 +46 +48

Victoria +33 +42 +32 +38 +39

Queensland +10 +18 +25 +35 +30

South Australia +6 +32 +1 +16 +5

Western Australia +29 +28 +18 +31 +11

Tasmania +32 +39 +18 +64 +47

Northern Territory +35 +43 +22 +24 +27

Australian Capital Territory +19 +33 +47 +38 +40

Metro Regional Total

National +37 +31 +35

New South Wales +55 +37 +48

Victoria +39 +39 +39

Queensland +42 +23 +30

South Australia +1 +13 +5

Western Australia +3 +35 +11

Tasmania +60 +40 +47

Northern Territory +32 +23 +27

Australian Capital Territory +40 NA +40

Trends by state - *net balance

Metro and regional confidence - *net balance

Confidence by business size

Confident Worried *Net Balance

Total 55% 20% +35

1-2 Employees 51% 21% +30

3-4 Employees 60% 14% +46

5-9 Employees 55% 18% +37

10-19 Employees 58% 25% +33

Total Small Business 55% 20% +35

20-99 Employees 59% 20% +39

100-199 Employees 62% 33% +29

Total Medium Business 60% 22% +38

Confidence by sector

Confident Worried *NetBalance

Manufacturing 47% 26% +21

Building and Construction 51% 24% +27

Wholesale Trade 56% 14% +42

Retail Trade 46% 25% +21

Transport and Storage 49% 33% +16

Communication Property & Business Services

63% 15% +48

Finance and Insurance 51% 12% +39

Health and Community Services 69% 10% +59

Cultural, Recreational and Personal Services

59% 16% +43

Hospitality (Accommodation, Cafes and Restaurants)

61% 20% +41

* Net balance is defined as the difference between the percentage of SMBs with a positive outlook and the percentage with a negative outlook.

Note: rounding occurs.

14

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SMBs have a more pessimistic view of the economy now and for the year ahead.

Key findings

SMB assessments of the current state of the economy are more negative than last survey and their expectations for the year ahead have shifted from positive to negative.

Last quarter

There was a five point deterioration in SMB assessments of whether the economy is growing or slowing down. The net balance is -22 compared to -17 last survey.

SMB perceptions of the current state of the Australian economy were negative throughout the nation. They are particularly low in WA (down 14 points to -46), the NT (down 17 points to -44) and SA (down seven points to -39). The highest net balance is in the ACT at -2.

Metropolitan and regional SMBs (-22) do not differ on this measure.

Views about the economy in a year’s time have fallen 13 points and are now in negative territory. The proportion expecting the economy to improve was eight points lower with a five point rise in the proportion who feel the economy will be worse in a year’s time. Consequently the net balance moved from +7 to -6. This is similar to the situation one year ago when the net balance was -9.

Expectations are now only positive in NSW (+3) and the ACT (+12). There is a double figure negative net balance for year ahead expectations in Victoria (-13), SA (-10), and the NT (-29).

There is a four point gap between metropolitan (-4) and regional (-8) SMBs on this measure.

Perceptions of the economy

52+35+13+y 54+20+26+y Same

Worse

5420

26

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

The economy now

Growth 12% 13% 13% 14% 13%

Slowing 35% 28% 32% 31% 35%

*Net Balance -23 -15 -19 -17 -22

The economy a year from now

Better 20% 18% 20% 28% 20%

Worse 29% 20% 24% 21% 26%

*Net Balance -9 -2 -4 +7 -6

NSW VIC QLD SA WA TAS NT ACT

The economy now

Growth 16% 14% 16% 6% 5% 19% 2% 21%

Slowing 34% 34% 29% 45% 51% 32% 46% 23%

*Net Balance -18 -20 -13 -39 -46 -13 -44 -2

The economy a year from now

Better 24% 17% 19% 15% 23% 19% 12% 33%

Worse 21% 30% 25% 25% 32% 23% 41% 21%

*Net Balance +3 -13 -6 -10 -9 -4 -29 +12

Perceptions of the economy - trends

Perceptions of the economy by state

60

0

20

40

-20

-40

-60

-80

The economy now The economy a year from now

Perceptions of the economy Long term trends - *net balance

Mar

13

Mar

09

Mar

10

Mar

11

Mar

12

* Net balance is defined as the difference between the percentage with a positive outlook and the percentage with a negative outlook.

SlowingBetter

The economy now The economy a year from now

GrowthStanding

still

Mar

14

5235

13

Mar

15

Mar

16

-6

-22

15

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Lack of work or sales continues to concern SMBs more than any other issue.

Key findings

About the same proportion of SMBs (43%) claim to be facing no significant problems in their business as last time (41%). Another consistent finding is the citing of lack of work or sales ahead of other concerns.

Last quarter

Twenty percent nominated lack of work or sales as the main issue impacting their business. This was up one point from last quarter. This concern stood out most in the NT and SA at 25% each and least in Victoria at 14%. In the health and community services sector only 11% worried about lack of work or sales but this was 27% in transport and storage.

Spontaneous concern about the economic climate was mentioned by 10% compared to 11% last time. Economic climate includes issues such as consumer confidence and spending levels, interest and exchange rates, concerns about the general economic climate, as well as global, state and regional economic concerns. This was most pronounced in WA (19%) and the wholesale sector (19%).

Concern about competition dropped from 10% to 7% with locational differences minor but the manufacturing and transport and storage sectors stood out (17% each).

Cash flow, bad debts and profitability were a concern mentioned by 6% overall, which was down by 1%. Most concerned were SMBs in SA (11%) and the transport and storage sector (19%).

Five percent of SMBs mentioned difficulties in finding quality staff, which compared with 6% last survey. They were asked about the specific problems they encountered with the top two responses again being lack of qualified or skilled staff (27%) and finding people who want to work (19%).

Concerns

As far as your business is concerned, what problems, if any, are you facing at the moment?

Prime concerns

Lack of work or sales

Economic climate

Competition

Cash flow, bad debts or profitability

Paperwork or bureaucracy

Finding or keeping staff

Costs or overheads

Employment costs and regulations

Taxes

No concerns = 43%

20%10%

7%6%

5%5%

4%3%

2%

20%

25%

30%

15%

10%

5%

0%

Prime concerns - long term trends - lack of work or sales

Mar

13

Mar

09

Mar

10

Mar

11

Mar

12

Mar

14

Mar

15

Mar

16

20%

Prime concerns - long term trends - economic climate

15%

20%

25%

10%

5%

0%

Mar

13

Mar

09

Mar

10

Mar

11

Mar

12

Mar

14

Mar

15

Mar

16

10%

Prime concerns - long term trends - cashflow20%

5%

10%

15%

0%

Mar

13

Mar

09

Mar

10

Mar

11

Mar

12

Mar

14

Mar

15

Mar

16

6%

16

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Sales remain flat but expectations are very optimistic.

Key findings

Sales performance remains subdued but this has not dampened expectations for the quarter ahead which have improved from an already positive position.

Last quarter

The net balance recorded for sales was one point lower at -2 and in line with observations over the past year.

Like last survey, sales performance was best in Tasmania (+8) followed by Victoria (+7) and by far the worst in WA and the NT (-27).

By industry sector, hospitality displayed the best sales performance (+15), with retail (+7) the only other sector recording a net balance above +1. The lowest net balance occurred in transport and storage (-17).

Current quarter

SMBs are quite upbeat about sales in the current quarter. Thirty-eight percent expect an increase in sales and 13% anticipate a drop generating a net balance of +25. This is nine points greater than last time.

Sales expectations display double figure net balances in all locations with NSW the highest at +30 and WA the lowest at +11.

Across the industry sectors, the most positive are communications, property and business services (+42), with cultural, recreational and personal services (+40) not far behind. Transport and storage is in stark contrast (+1), with the next lowest sector being finance and insurance on +19.

Sales

50

40

30

20

10

0

-10

-20

-30

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

Last Quarter

Experienced increase 30% 23% 29% 26% 27%

No change 37% 50% 41% 45% 42%

Experienced decrease 31% 25% 29% 27% 29%

*Net Balance -1 -2 0 -1 -2

Current Quarter

Expect increase 43% 31% 38% 32% 38%

No change 44% 55% 46% 49% 47%

Expect decrease 12% 13% 14% 16% 13%

*Net Balance +31 +18 +24 +16 +25

Value of sales

Experience Expectations

Value of sales - trends in *net balance


Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

+25

-2

Mar

16

17

1 3 42 5


Weakness has persisted in this indicator but expectations have improved.

Key findings

For some time employment has battled to rise above neutral on net balance but expectations for the current quarter are at their highest level in more than a year.

Last quarter

Eight percent of SMBs employed more staff while 11% reduced their staffing which resulted in a negative net balance.

The only state with a positive net balance was NSW (+4). All others were negative ranging from -3 in Tasmania and the ACT to -12 in the NT.

The best sector results were in hospitality and finance and insurance (+4 in each), with the worst being cultural, recreational and personal services (-9).

Fifty percent reported barriers to taking on new employees (52% last survey). Lack of work or sales remains the dominant roadblock mentioned by 51% (49% last survey). Business growth was again the main catalyst behind staff increases.

Current quarter

There was an improvement noted with 14% predicting an increase in staffing and 3% a fall. The net balance of +11 is the highest in more than a year.

The ACT (+17) and NSW (+15) are the most optimistic with Tasmania at the bottom of the pack (+2).

By sector, expectations are highest in cultural, recreational and personal services (+19) and lowest in retail (0).

Employment

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

Last QuarterExperienced increase 11% 8% 12% 10% 8%No change 79% 81% 75% 80% 82%Experienced decrease 10% 11% 13% 10% 11%*Net Balance +1 -3 -1 0 -3Current QuarterExpect increase 14% 11% 13% 12% 14%No change 78% 83% 80% 79% 81%Expect decrease 7% 5% 6% 7% 3%*Net Balance +7 +6 +7 +5 +11

Size of workforce

Why SMBs have increased employment - Mar 2016

Note: Base = SMBs that have increased staff in

the past quarter (8% of all respondents).

37%16%

8%

16%

5%10%

15%


15

20

5

10

0

-5

-10


Size of workforce - trends in *net balance

+11

-3

Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

Mar

16

What are the barriers to taking on new employees?

Note: Base = those who believe barriers or impediments exist

(50% of all respondents).

All other responses 2% or less.

51%8%

Lack of work or sales

Finding suitable staff

Profitability or lack of profits

Lack of funds

Cost of employing

Economic climate

Cost of wages

Don’t need any more staff

Budget or can’t afford it

Employment conditions

Fluctuating workload

Low consumer confidence

Lack of space or capacity

Superannuation

Hard to find reliable staff

7%6%6%5%5%

3%

4%

3%

3%

3%

4%

3%

3%

Business is growing

Increasing staff from part time to full time

Replacing staff that left

Planning ahead for economic growth

Economic conditions improving

Easier to find staff in current economic conditions

Other reason

18

1 3 42 5


Wages have lifted slightly.

Key findings

Wage rises were a little more common than in the last quarter and that is also true regarding expected wage growth across SMBs.

Last quarter

Twenty-two percent recorded increased wages against a 13% fall. The net balance of +9 compares with +6 previously and +10 one year ago.

Wages growth last quarter was comparatively high in NSW and Victoria where the net balances registered +15 and +17 respectively. In stark contrast were WA (-12) and the NT (-7). Elsewhere the net balances were positive ranging from +1 to +4.

Sector-wise, net balances were clearly above average in health and community services (+30), finance and insurance (+23), retail (+19) and hospitality (+17). The transport and storage sector was lowest on this indicator (-8), with manufacturing at -5.

Current quarter

This quarter, 21% foresee increased wages and 8% anticipate a fall giving rise to a net balance of +13. This compares with +11 last quarter and +16 a year ago.

There is a positive net balance in all locations for wage expectations ranging from +5 in the NT to +17 in NSW.

By sector, expected wages growth is highest in wholesale trade (+24) and lowest in transport and storage (+1).

Wages bill

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

Last Quarter


No change 56% 67% 57% 61% 62%


*Net Balance +10 +1 +10 +6 +9

Current Quarter


No change 67% 71% 65% 67% 69%


*Net Balance +16 +14 +19 +11 +13

Wages bill

30

0

10

20

-10

-20


Wages bill - trends in *net balance


Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

+13

+9

Mar

16

19

1 3 42 5


Pricing behaviour and expectations have been consistent for the past year.

Key findings

Price growth has been fairly steady for a year and expectations have not changed dramatically in that time.

Last quarter

For the third quarter in succession the net balance was +9. This compares to +11 a year ago. Price rises were recorded by 18%, with 9% cutting prices.

Net price increases last quarter were in the range of +2 (WA) to +18 (Tasmania).

By sector, wholesale trade (+27) stood out followed by hospitality (+25). These results were much higher than those seen in manufacturing (-1); transport and storage (+2); communication, property and business services (+2) and building and construction (+3).

Current quarter

Expectations for price rises this quarter were five points higher creating a net balance of +19. In the March quarter last year this indicator registered +21.

Expectations varied from +16 in WA and the NT to +27 in the ACT.

Across sectors, expectations for increased pricing were strongest in wholesale trade (+35). Lowest on this measure were SMBs in transport and storage (+11).

Prices

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

Last Quarter


No change 67% 73% 70% 76% 71%


*Net Balance +11 +8 +9 +9 +9

Current Quarter


No change 68% 75% 72% 78% 69%


*Net Balance +21 +18 +16 +14 +19

Prices charged

30

40

0

10

20

-10


Prices charged - trends in *net balance

+19

+9

Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

Mar

16

20

1 3 42 5


Profitability

Despite even weaker profitability results, expectations have lifted for this quarter.

Key findings

Profitability performance deteriorated but expectations for the next quarter have improved.

Last quarter

Twenty one percent experienced a profit rise against a 32% fall. The net balance result of -11 compares with -5 last survey and -10 in the March 2015 survey.

The last net positive profitability result recorded was in February 2008.

Profitability was negative everywhere but especially so in WA (-28) and the NT (-36).

Only in the cultural, recreation and personal services sector (+8) did we see a positive net balance for profitability. Manufacturing (-30) had the lowest score, followed by transport and storage (-22).

Current quarter

Profitability expectations for the current quarter were eight points higher overall at +18.

Profitability expectations are clearly above average in NSW (+24) and the ACT (+26). The opposite is true for WA (+5), with SA relatively low (+11). Other locations are close to the average.

The cultural, recreational and personal services (+37) and communications, property and business services (+33) sectors are the most positive, with the weakest being hospitality (+5) and transport and storage (+3).

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

Last Quarter


No change 40% 53% 43% 47% 45%


*Net Balance -10 -3 -7 -5 -11

Current Quarter


No change 41% 55% 47% 50% 50%


*Net Balance +31 +15 +19 +10 +18

Profitability

50

0

10

20

30

40

-20

-10

-40

-30


Profitability - trends in *net balance


+18

-11

Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

Mar

16

21

1 3 42 5


SMBs are still not finding it easy to obtain finance.

Key findings

SMBs’ ability to access finance is critical for capital expenditure and growth. For quite some time it has not been easy for them to access finance on balance.

Last quarter

Accessing finance has not really changed for SMBs during the past twelve months. The net score of +4 compares with +3 last survey and +6 a year ago.

SMBs in SA (-8) and the NT (-12) found it the most difficult to access finance in contrast to those in Victoria (+10) and Tasmania (+9).

By sector, wholesale trade (+19) stood out at the top end while SMBs in finance and insurance found this the most difficult (-11).

Medium size firms (+10) still found it easier than small firms (+3) to access finance but the gap in favour of medium firms has decreased from +27 two quarters ago to +14 last quarter and +7 now.

Thirteen percent of SMBs sought finance which is down from 16% in the previous quarter. Of those that tried to access finance this quarter 72% had success.

The incidence of seeking finance ranged from 10% in the NT to 17% in WA. SMBs in the manufacturing and cultural, recreation and personal services sectors (19% each) were the most likely to have sought finance.

Access to finance

87+13+y

72+21+7+yMar 15

Jun 15

Sep 15

Dec 15

Mar 16

Last QuarterRelatively easy 24% 19% 23% 24% 27%Average 58% 66% 55% 56% 50%Relatively hard 18% 15% 22% 21% 23%*Net Balance +6 +4 +1 +3 +4

Access to finance

Access to finance - trends in *net balance

Success in accessing finance

Have you tried to access finance for your business in the past quarter?

Were you successful?

Ease of accessing finance - by business size (Mar 2016)

Easy Difficult *Net Balance

Total 27% 23% +4

1-2 Employees 25% 23% +2

3-4 Employees 28% 22% +6

5-9 Employees 32% 21% +11

10-19 Employees 23% 31% -8

Total Small Business 27% 24% +3

20-99 Employees 30% 17% +13

100-199 Employees 20% 25% -5

Total Medium Business 29% 19% +10

No

Pending

Yes

No

Yes


Base: Those who had tried to access finance.

13

7

7221

+4

+23

+27

87

0

10

20

30

40

50

-30

-20

-10

-40

-50

Relatively easy Relatively hard *Net balance

Mar

14

Mar

11

Mar

12

Mar

13

Mar

15

Mar

16

22

21 543

Government policies ..............................................................................................................................................................................23

Assessment of Federal Government policies ...................................................................................................................................24

Assessment of state and territory government policies ...............................................................................................................25

Government Policies

22

21 543

Sensis Business Index | Government policies

23

21 543


21 543

Government policies

The maps below show the net balance of attitudes to Federal, state and territory government policies. This is calculated from the proportion believing the government is supportive less the proportion believing it to be working against small business interests. Also displayed is the change in net balance compared with the previous quarter.

Attitudes to Federal Government policies

Attitudes to state and territory government policies

Western Australia

Northern Territory

South Australia New South

Wales

Victoria

Queensland

National

ACT

Tasmania

3

11

10

2

1

3

1

6

1

2

6

2

3

-9

-7

+7

-22+8

+5

-11

+6

-17

+1

+9

+11

+14

4-1

14+0

5+8

7+10

Western Australia

Northern Territory

South Australia New South

Wales

Victoria

Queensland

ACT

Tasmania

24

21 543


SMBs still view the Federal Government positively.

Key findings

SMBs see the Federal Government in a similarly positive light as last survey and much more so than one year ago.

Last quarter

Twenty five percent viewed Federal Government policies as supportive of SMBs with 19% having the opposite opinion. The net balance of +6 compares with the prior result of +7 last quarter but -8 in March 2015.

The top three reasons for a favourable assessment of the government are tax incentives (17%), being supportive and interested in small business (11%) and good government policies (11%).

SMBs critical of the Federal Government’s policies mentioned excessive bureaucracy or red tape (23%) followed by a lack of incentives, support or financial assistance for small business (14%), high taxes (14%) and there being too much of a focus on big business (12%).

Businesses in Tasmania (+11) rated the Federal Government above others for their support of small business. In WA (-1) opinions are unfavourable and in the NT they are neutral.

The transport and storage (-13); hospitality (-5); and cultural, recreational and other personal services (-1) sectors posted the only negative results on this measure. Finance and insurance (+19) and health and community services (+16) were the most positive about the Federal Government.

Assessment of Federal Government policies

Mar 15 Jun 15 Sep 15 Dec 15 Mar 16

Supportive 16% 30% 25% 27% 25%

Work against 24% 12% 24% 20% 19%

No impact 60% 58% 51% 53% 56%

*Net Balance -8 +18 +1 +7 +6

Attitudes to Federal Government policies - trends

Thinking about the current Federal Government, do you believe that their policies are supportive of small business, work against small business or have no real impact either way?

Supportive Work against

Attitudes to Federal Government policies - long term trends

30%

40%

60%

50%

70%

20%

10%

0%

25%

19%


Mar

14

Mar

09

Mar

10

Mar

11

Mar

12

Mar

13

Mar

15

Mar

16

25

21 543


Only the NSW, Tasmania and ACT Governments garner favourable ratings overall.

Key findings

This quarter an average of 16% of SMBs felt their state or territory government was supportive and 22% felt they were working against small business interests, resulting in a net balance of -6. This is the same result as last survey.

The NSW, Tasmanian and ACT Governments are still the only ones assessed positively overall as supportive of SMBs. The SA Government continues to attract the most criticism.

Last quarter

Net balances are positive in NSW (+8), the ACT (+9) and Tasmania (+14) but only in Tasmania did they improve (by 2 points). There were improved scores in WA, Victoria and SA but their net balances remained negative. Queensland and the NT also had negative ratings.

The main appeal of the Tasmanian Government is that it is trying to reduce bureaucracy and red tape (22%). That is also the case in the ACT (18%), while the NSW Government drew praise for infrastructure development (18%).

The major criticisms of the SA Government, which has been the least popular for over two years were a lack of incentives or support for small business (14%), poor economic management (13%) and payroll tax (12%). The Queensland Government was criticised for a lack of incentives or support for small business (13%), poor economic management (11%), and increasing taxation (13%).

Assessment of state and territory government policies

Attitudes to state or territory government policies (Mar 2016)

Mar 15

Jun 15

Sep 15

Dec 15

Mar 16

New South Wales +16 +18 +10 +11 +8

Victoria -16 -8 -16 -17 -11

Queensland -24 -22 -22 -15 -17

South Australia -27 -30 -34 -32 -22

Western Australia -3 -2 -10 -10 -9

Tasmania +15 +7 +26 +12 +14

Northern Territory -5 +18 +10 -4 -7

Australian Capital Territory +3 -3 -3 +12 +9

Attitudes to state or territory government policies - trends in *net balance


NSW VIC QLD SA WA TAS NT ACT

Supportive 21% 13% 12% 15% 16% 27% 24% 25%

Work against 13% 24% 29% 37% 25% 13% 31% 16%

No impact 67% 63% 59% 48% 59% 60% 46% 59%

*Net Balance +8 -11 -17 -22 -9 +14 -7 +9

Thinking about the current state/territory government, do you believe that their policies are supportive of small business, work against small business or have no real impact either way?

Note: Rounding occurs.

26

21 53 4

26

21 53 4

Sensis Business Index | Small and medium business outlook

National .................................................................................................................................................................................................... 27

New South Wales ...................................................................................................................................................................................28

Victoria ......................................................................................................................................................................................................29

Queensland ..............................................................................................................................................................................................30

South Australia ........................................................................................................................................................................................31

Western Australia ...................................................................................................................................................................................32

Tasmania ..................................................................................................................................................................................................33

Northern Territory ...................................................................................................................................................................................34

Australian Capital Territory ...................................................................................................................................................................35

Small and Medium Business Outlook

27

21 53 4


Confidence eased but remains high among SMBs despite expectations of a worsening economy.

• Confidence dropped four points this quarter but this is still the second highest level in the past two years.

• Assessments of the current state of the economy were also five points lower and remain quite negative overall (-22). Furthermore, the improved expectations for the economy in a year’s time observed last survey have been more than wiped away by a 13 point decrease which resulted in a negative net balance of -6.

• Sales and profitability results remained negative and employment is now also in negative territory. The experience in regards to wages was more positive.

• Expectations for next quarter on each key performance indicator rose and displayed double figure positive balances despite the ordinary quarter just experienced and the gloomy outlook for the economy.

• The Federal Government is still favourably regarded by SMBs primarily because of tax and other incentives that have been made available.

• Whereas last quarter 8% of SMBs mentioned the new Prime Minister as influencing their positive perceptions of the Government, that figure is now less than 1%.

Small and medium business outlook – National

Trends in the past three months’ experience and current expectations - National

Confidence in own business prospects in next 12 months Mar 15 Jun 15 Sep 15 Dec 15 Mar 16

Positive 49% 51% 50% 57% 55%

Negative 22% 20% 23% 18% 20%

*Net Balance +27 +31 +27 +39 +35

*Net balance

Actual experience**: Expectation for next 3 months:

Mar 2015 Dec 2015 Mar 2016 Mar 2015 Dec 2015 Mar 2016

Sales -1 -1 -2 +31 +16 +25

Size of workforce +1 0 -3 +7 +5 +11

Wages +10 +6 +9 +16 +11 +13

Prices +11 +9 +9 +21 +14 +19

Profitability -10 -5 -11 +31 +10 +18

* Net balance is defined as the difference between the percentage with a positive outlook and the percentage with a negative outlook. ** This is for the last 3 months.

28

21 53 4


Confidence rose for the third quarter in succession and is now the highest in the nation. On key indicators NSW performed better than most last quarter and expectations for this quarter are also among the best. The NSW Government remains one of only three state and territory governments with a positive rating overall.

• In NSW, business confidence rose two points which has moved the state into top spot on this measure.

• As before, confidence has been primarily driven by being an established, solid business, having specific business strengths and good sales. Worried SMBs referred to falling sales most of all with an unfavourable business environment also a prominent concern.

• Last quarter, SMBs in NSW experienced slightly improved sales but profitability declined. However, there was some growth in employment and wages with prices remaining positive on balance.

• Expectations for all indicators in the current quarter are higher and quite positive. Sales and profitability expectations lifted by 12 points each to +30 and +24, making them the highest and second highest scores nationally.

• SMB support for the policies of the NSW Government fell three points to a net balance of +8, but this remains one of only three positive assessments of state governments observed. The main reason for a positive view is that the Government is supportive and interested. Excessive bureaucracy is the major criticism.

Small and medium business outlook – New South Wales

Trends in the past three months’ experience and current expectations - New South Wales


Positive 55% 51% 54% 61% 64%

Negative 17% 20% 20% 15% 16%

*Net Balance +38 +31 +34 +46 +48


*Net balance



Sales +4 0 +4 +36 +18 +30

Size of workforce +8 -1 +4 +4 +8 +15

Wages +8 +9 +15 +11 +13 +17

Prices +13 +12 +12 +13 +16 +17

Profitability -3 -5 -9 +34 +12 +24

29

21 53 4


Confidence is above average in Victoria. Key indicator performance has been mixed but expectations are upbeat. Perceptions towards the Victorian Government improved but the net balance remains negative.

• Overall confidence was one point higher reaching a net balance of +39, which is now ahead of the national average.

• SMBs mentioned specific business strengths followed by being an established, solid business as the key factors driving confidence, while sales weakness dominated among those with concerns.

• Last quarter, sales were marginally higher but profitability became negative overall. Wages spiked and prices lifted but employment contracted.

• For the current quarter, expectations on all five indicators were higher and positive. Sales expectations rose by eight points to +27 and profitability by three points to +19. Employment expectations also lifted by seven points to +11.

• Victorian SMBs were less critical of the State Government which saw a six point improvement but a negative net balance was still observed (-11). The main gripes about the Victorian Government were a lack of infrastructure investment and a lack of understanding of small businesses. Favourable opinions were also influenced by infrastructure development and training schemes.

Small and medium business outlook –Victoria

Trends in the past three months’ experience and current expectations - Victoria


Positive 51% 56% 54% 55% 56%

Negative 18% 14% 22% 17% 17%

*Net Balance +33 +42 +32 +38 +39


*Net balance



Sales +12 +5 +7 +32 +19 +27

Size of workforce -3 -1 -4 +16 +4 +11

Wages +20 +4 +17 +22 +11 +14

Prices +15 +8 +10 +30 +17 +25

Profitability -3 +1 -4 +36 +16 +19

30

21 53 4


Confidence had been on an upward path but it has now gone backwards. Despite this it is three times higher than one year ago. Last quarter proved difficult yet expectations on key indicators for this quarter are up. The Queensland Government remains unpopular with SMBs.

• Confidence was lower in Queensland among SMBs, down five points to +30 which is below the national average.

• The confident firms cited a positive attitude and healthy sales as the top two influences. The concerned SMBs bemoaned an unfavourable business, economic or industrial environment followed by decreasing sales.

• Last quarter all indicators were lower with sales, employment and profitability negative.

• Expectations for the current quarter are positive and increasingly so for all five indicators. Those expectations range from +8 for employment to +23 for sales. Profitability expectations registered +15.

• The Queensland Government has the second lowest rating of all dropping two points to a net balance of -17. The most common criticisms are that there is too much bureaucracy and red tape. Being supportive and interested in small business and encouraging growth were the leading reasons for a favourable opinion.

Small and medium business outlook – Queensland

Trends in the past three months’ experience and current expectations - Queensland


Positive 42% 44% 47% 56% 49%

Negative 32% 26% 22% 21% 19%

*Net Balance +10 +18 +25 +35 +30


*Net balance



Sales -24 0 -6 +29 +13 +23

Size of workforce -3 +10 -9 +2 +3 +8

Wages +1 +12 +1 +18 +11 +12

Prices +8 +10 +5 +20 +10 +17

Profitability -28 -3 -9 +25 +7 +15

31

21 53 4


SA again registered the lowest confidence level and is well behind the national average. Despite this expectations remain relatively upbeat.

• After a solid boost in confidence last survey there has been an 11 point fall this quarter to +5. SA remains the least confident state and sits well behind the national average.

• Businesses with a positive attitude were the leading drivers of confidence. Those concerned are seeing real weakness in sales and demand.

• In the last quarter, sales and profitability declined even further into negative territory.

• For this quarter, expectations are positive for all five indicators. Price rises are expected to be much more widespread with expectations for sales up 10 points to +16 and profitability up six points to +11. This should be accompanied by increased employment for which the net balance was up 14 points to +12.

• The SA Government (-22 net) remains easily the most negatively perceived of all state and territory governments by SMBs. Excessive bureaucracy and red tape are the biggest criticisms, while employment training schemes and offering incentives, subsidies and grants are generating some positive opinions.

Small and medium business outlook – South Australia

Trends in the past three months’ experience and current expectations - South Australia


Positive 34% 50% 35% 44% 39%

Negative 28% 18% 34% 28% 34%

*Net Balance +6 +32 +1 +16 +5


*Net balance



Sales -18 -4 -9 +14 +6 +16

Size of workforce -3 -5 -7 +1 -2 +12

Wages -12 +7 +1 +7 +5 +7

Prices +7 0 +8 +17 +6 +21

Profitability -19 -8 -14 +14 +5 +11

32

21 53 4


Confidence has taken a hit in WA on the back of weak sales and profitability for SMBs last quarter. Expectations are positive overall although they are much worse off than this time one year ago.

• Confidence was 20 points lower in WA, which now trails the national average by 24 points.

• Being an established, solid business and having specific business strengths drove confidence more than other factors, while worried SMBs pointed to an unfavourable business, economic or industrial environment and falling sales.

• Last quarter, all key indicators were lower with notably weak sales (-27) and profitability (-28) performances.

• On the plus side current quarter expectations are higher and positive for all five performance indicators. The net balance for sales was +11 and +5 for profitability, both up by eight points.

• Support for the WA Government was marginally up (by one point) but remains negative (-9). Critics mentioned land tax issues and claimed the WA Government is too focused on big business, the mining industry and multinationals. Those satisfied believe the WA Government has policies in place that support SMBs.

Small and medium business outlook –Western Australia

Trends in the past three months’ experience and current expectations - Western Australia


Positive 52% 51% 48% 52% 47%

Negative 23% 23% 30% 21% 36%

*Net Balance +29 +28 +18 +31 +11


*Net balance



Sales +5 -19 -27 +37 +3 +11

Size of workforce +2 -6 -8 +6 +2 +4

Wages +17 -7 -12 +13 -1 +8

Prices +8 +4 +2 +27 +6 +16

Profitability -8 -21 -28 +34 -3 +5

33

21 53 4


Confidence fell from the impressive levels seen last quarter to remain the second best in the nation. The latest quarter has been more challenging for Tasmanian SMBs and tempered their performance expectations but they see their State Government as supportive.

• Last survey, overall confidence more than tripled in Tasmania to reach a score of +64. This has fallen to +47 this quarter which is still well above the national average and 15 points higher than one year ago.

• Specific business strengths and initiatives taken by businesses influenced confidence most of all. Worried SMBs highlight decreasing sales and softer demand conditions.

• Last quarter all of the key performance indicators fell with profitability becoming negative.

• For the current quarter SMBs remain positive but to a lesser degree than last survey, with the exception of prices. The expectations of Tasmanian SMBs are now below the national average for sales (+16) and profitability (+16).

• SMB support for the Tasmanian Government’s policies was two points higher at +14, making it the most popular State Government. SMBs appreciate that the Government is seeking to reduce bureaucracy and red tape. Those who were critical were concerned even more needed to be done to address excessive bureaucracy and high taxation.

Small and medium business outlook –Tasmania

Trends in the past three months’ experience and current expectations - Tasmania


Positive 50% 56% 43% 72% 57%

Negative 18% 17% 25% 8% 10%

*Net Balance +32 +39 +18 +64 +47


*Net balance



Sales +19 +17 +8 +10 +46 +16


Wages +29 +19 +4 +5 +33 +10

Prices +16 +22 +18 +9 +19 +24

Profitability +7 +17 -4 +12 +38 +16

34

21 53 4


Confidence among SMBs appears to be edging up in the NT but it remains below average and below the level observed one year ago. Conditions have been tough of late but expectations have become more optimistic. The NT Government is finding it difficult to regain its previous support among SMBs.

• Confidence was three points higher among SMBs but it remains eight points below the national average. One year ago it was eight points above the national average.

• Specific business strengths were the most common factors behind confidence, followed by being an established, solid business. Falling sales and demand, followed by unfavourable business conditions dominated the concerns of worried SMBs.

• Last quarter, sales and profitability fell markedly with wages and employment also well down.

• For this quarter expectations for all performance indicators are positive and considerably improved, especially for sales (up 33 points to +24) and profitability (up 30 points to +16).

• SMB support for the Northern Territory Government dropped three points to a net balance of -7. Those positively inclined feel the government is supportive and interested. The most common complaint is that the Government is only concerned with big businesses.

Small and medium business outlook – Northern Territory

Trends in the past three months’ experience and current expectations - Northern Territory


Positive 53% 59% 54% 53% 46%

Negative 18% 16% 32% 29% 19%

*Net Balance +35 +43 +22 +24 +27


*Net balance



Sales -21 -3 -27 +45 -9 +24

Size of workforce +3 0 -12 +10 -10 +6

Wages +2 +12 -7 +21 -3 +5

Prices -3 +10 +10 +29 +7 +16

Profitability -30 -17 -36 +33 -14 +16

35

21 53 4


Confidence is slightly higher despite a difficult quarter. It exceeds the national average with sales and profitability expectations strong.

• SMB confidence in the ACT rose two points which lifts it above the national average and it is more than twice the level recorded one year ago when it displayed the lowest confidence of all.

• Confidence arose from having specific business strengths and an optimistic attitude. Those lacking confidence reported weak sales and an unfavourable business environment.

• Sales were flat and profitability declined last quarter but expectations for this quarter on all of the indicators are positive.

• Support for the policies of the ACT Government among SMBs was down three points to +9. This makes it the second most popular Government and one of only three Governments with a positive net balance.

• Favourable opinion is influenced primarily by efforts to reduce bureaucracy and red tape. The major concern is a perceived lack of understanding of the needs of small businesses.

Small and medium business outlook – Australian Capital Territory

Trends in the past three months’ experience and current expectations - Australian Capital Territory


Positive 41% 54% 61% 63% 55%

Negative 22% 21% 14% 25% 15%

*Net Balance +19 +33 +47 +38 +40


*Net balance



Sales -1 -1 +1 +23 +35 +28


Wages -11 +10 +7 +17 +19 +9

Prices +6 +11 +10 +25 +11 +27

Profitability -13 -6 -10 +24 +33 +26

36Sensis Business Index | Industry snapshots

36

21 43 5

Industry Snapshots

Manufacturing......................................................................................................................................................................................... 37

Building and Construction .................................................................................................................................................................... 37

Wholesale Trade ......................................................................................................................................................................................38

Retail Trade ..............................................................................................................................................................................................38

Transport and Storage ...........................................................................................................................................................................39

Communication, Property and Business Services ...........................................................................................................................39

Finance and Insurance ..........................................................................................................................................................................40

Health and Community Services .........................................................................................................................................................40

Cultural, Recreational and Personal Services ....................................................................................................................................41

Hospitality (Accommodation, Cafes and Restaurants) ....................................................................................................................41

Sensis Business Index | Industry snapshots37

21 43 5

Industry snapshots

Confidence is up albeit still quite low. Despite this manufacturers have relatively optimistic expectations.

Confidence rose six points to a net balance +21. This is 14 points below the national average.

Confident manufacturers point to being an established, solid business and having specific business strengths. Weak sales and demand underpin those with low confidence.

Last quarter each indicator was weak among manufacturers with profitability (-30) especially low. The other net balances were +1 for sales, -3 for employment, -5 for wages and -1 for prices.

Conversely, for the current quarter expectations for all indicators are positive - sales (+23), profitability (+21), prices (+20), wages (+20) and employment (+16).

A big fall in confidence was seen in this sector but expectations for all of the performance indicators remain positive.

Confidence fell sharply from +47 to +27 taking this from the second most confident sector to fourth lowest.

Sales performance has driven confidence more than other factors. Unfavourable business conditions and lower sales are generating the most concern.

Last quarter sales (-6), profitability (-13) and employment (-4) were negative with balances of +5 for wages and +3 for prices.

This quarter, building and construction SMBs are reasonably optimistic about sales (+20), profitability (+11), prices (+17) wages (+14) and employment (+14).

Manufacturing

Building and Construction

National ConfidenceManufacturing Confidence

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

-20

20

40

0

Manufacturing Confidence

Building and Construction Confidence

+21

-20

20

40

0

60

National ConfidenceBuilding and Construction Confidence

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+27


21 43 5

Industry snapshots

Confidence has increased markedly over the last two quarters placing this sector above average. Expectations for the key performance indicators are all positive.

Confidence has again lifted from +30 to +42 after being only +2 in the September quarter.

Those who are worried are mostly experiencing poor sales in contrast to those who are confident where the reverse is true.

All key indicators except prices (+27) were negative last quarter - sales (-7), wages (-3), profitability (-6) and employment (-1).

Despite this, expectations for all of the indicators are fairly positive this quarter, especially for sales at +32 and prices at +35. Profitability recorded +16, wages +24 and employment +8.

Wholesale Trade

Overall confidence again increased marginally but remains below the national average. Retailers are expecting this quarter to be better than the last one.

Confidence rose two points to +21 but retail remains one of the least confident sectors.

Being an established business and having an optimistic attitude are the main influences on confidence. Hard business conditions and weak sales are the key causes of pessimism.

Last quarter, sales (+7), wages (+19) and prices (+10) were positive, while profitability (-11) and employment (-3) were negative.

For the current quarter expectations are healthy for each indicator - sales (+20), profitability (+12), prices (+22) and wages (+7). The exception is employment with a net balance of 0.

Retail Trade

Wholesale Trade Confidence

Retail Trade Confidence

-20

20

40

0

60

National ConfidenceWholesale Trade Confidence

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+42

-20

20

40

0

60

National ConfidenceRetail Trade Confidence

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+21


21 43 5

Industry snapshots

This is now the least confident sector on the back of a very challenging quarter which has led to modest expectations.

Confidence fell in this sector by eight points to +16, making it the least confident of all.

Being an established, solid business is the key influence on confidence. Difficult business conditions and weak sales characterise the worried SMBs.

Last quarter the net balances were negative on four of the five indicators - sales (-17), profitability (-22), wages (-8) and employment (-5). The exception was prices with a score of +2. The sales result was the lowest of all sectors and the profitability result was the second lowest.

This quarter, the five key performance indicators are positive but lowest across the sectors for sales (+1) profitability (+3), wages (+1) and prices (+11). Employment recorded a net balance of +12.

Transport and Storage

A boost to confidence has lifted this sector well above the national average. Last quarter was a struggle but performance expectations remain high.

Confidence was up 10 points to +48 placing this sector second highest on this measure.

Having specific business strengths, an established, solid business and healthy sales are generating confidence. An unfavourable business environment is the primary concern.

Last quarter, key indicator results were unimpressive but still among the best for sales (0), profitability (-1), prices (+2) and wages (+3). Employment was quite weak however (-7).

This quarter’s expectations for the five key indicators ranged from solid to high, especially for sales at +42, which is the most optimistic score observed and profitability at +33, which is second highest. The net balances for the other three indicators were +19 for prices, +16 for wages and +11 for employment.

Communication, Property and Business Services

Transport and Storage Confidence

Communication, Property and Business Services Confidence

-20

20

40

0

60

Transport and Storage Confidence National Confidence

Mar 15

Mar 16

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

+16

National ConfidenceCommunication, Property and Business Services Confidence

-20

20

40

0

60

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+48


21 43 5

Industry snapshots

Confidence fell slightly but the sector remains easily the most confident.

Confidence was nine points lower but still easily the highest at +59, which is 24 points above the national average. Specific business strengths drove confidence, while competitive pressures were the major issue for worried SMBs.

Last quarter profitability (-1) and sales (+1) were weak but still better than most. This sector was also among the best performers on employment (+1), wages (+32) and prices (+23).

For this quarter solid performances are anticipated - sales (+24), profitability (+21), wages (+12), prices (+22) and employment (+9).

Confidence remains about the national average. Expectations are for this quarter to be better than last quarter.

Confidence in this sector eased one point to +39, which still leaves it ahead of the national average.

Being an established, solid business remains the major reason for confidence, while difficult business, economic or industrial conditions remain the major influence on those who are concerned.

Last quarter sales difficulty was apparent (-2) and profitability was weak (-20). The other indicators recorded positive balances - prices (+7), wages (+23) and employment (+4).

This quarter, indicator expectations are all favourable - sales and profitability (each at +19), employment (+10), wages (+12) and prices (+13).

Finance and Insurance

Health and Community Services

Finance and Insurance Confidence

Health and Community Services Confidence

Finance and Insurance Confidence National Confidence

-20

20

40

0

60

80

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+39

-20

20

40

0

60

Health and Community Services Confidence

National Confidence

80

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+59


21 43 5

Industry snapshots

Confidence remains relatively strong in this sector. Sales and profitability expectations are the highest of all.

Overall confidence in this sector was up one point to +43.

Specific business strengths are the main driver of confidence, while decreasing sales and demand dominate concerns.

Sales were soft last quarter (-1) but this sector was the only one with a positive net balance for profitability (+8). Prices lifted (+25) and wages were positive (+6), while employment was a concern (-9).

For the current quarter the most upbeat expectations of all were observed for sales at +39 and for profitability at +37. The results were also among the most positive for wages (+19), prices (+24) and employment (+19).

Overall confidence was again up in hospitality and is now above average. Sales were solid last quarter and expectations are positive for this quarter on all of the key indicators.

Confidence in this sector continued an upward path rising by three points to +41 to take it above the national average.

Being an established, solid business and specific business strengths mostly explained confidence. The major concern is sales and demand weakness.

Last quarter sales were clearly better than in any other sector recording a net balance of +15 but profitability remained negative (-8). There were positive net balances for the other indicators - employment (+4), wages (+17) and prices (+25).

This quarter, sales look promising (+21) and profitability is expected to improve (+5) with prices also rising (+21). The net balance expectations recorded for wages and employment were +5 and +8 respectively.

Hospitality (Accommodation, Cafes and Restaurants)

Cultural, Recreational and Personal Services Cultural, Recreational and Personal Services Confidence

Hospitality (Accommodation, Cafes and Restaurants) Confidence

-20

20

40

0

60

Cultural, Recreational and Personal Services Confidence

National Confidence

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+43

-20

20

40

0

60

Hospitality (Accommodation, Cafes and Restaurants) Confidence

National Confidence

Mar 10

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

+41

42

21 43 5

The Sensis Business Index reports are updated each quarter. Electronic copies of the reports can be accessed on the Sensis website at: www.sensis.com.au/about/reports.

Sensis Business Index “Special Reports”

Since the inception of the Sensis Business Index, a range of Special Reports have been produced. Major reports include:

• Sensis Social Media Report – May 2011, May 2012, May 2013, April 2014 and May 2015

• Engaging the Dragon: Australian SME Exporters and China (with Austrade) – August 2008

• Sensis Environment Report – September 2007

• Teleworking - June 2005

• E-Business: The online experience of Australian SMEs – Annually since 1995

• Innovation – March 2001

• Finance & Banking Issues – August 1993, August 1995 and November 1999

• Attitudes to Changes in FBT – July 1999

• Workers’ Compensation and Workplace Safety – November 1998

• The Paper Work Burden on Small Business – October 1996

• Women in Business – July 1994 and February 1996

• Attitudes to Government – October 1994 and November 1995

About Sensis:

As Australia’s #1 marketing services company, we’re here to engage consumers with Australian businesses. We make this happen through a number of leading brands - Yellow Pages, White Pages, True Local, Whereis and Skip and our expert digital know-how. Our digital expertise is what sets us apart - we give businesses a competitive edge through websites, search engine marketing and optimisation, data, and through our digital advertising agency, Found.

Sensis Pty Ltd 222 Lonsdale Street, Melbourne VIC 3000 Tel: + 61 3 8653 5000 | Twitter: @Sensis | www.sensis.com.au

The material contained in this publication is general only and is not intended as advice on any particular matter. No reader should act or fail to act on the basis of this report. Sensis Pty Ltd disclaims to the

maximum extent permitted by law all liability, costs and expenses incurred by any person in conjunction with the content of this report.

business index march 2016 · 2018-05-29 · interviewing was conducted from january 18 to february...

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