Business confidence has jumped to levels not seen since 2011, and the health and community services sector is most confident of all, according to new Sensis data.
The latest Sensis Business Index survey, which reflects the views of 1000 small and medium businesses from across the country, found that business confidence jumped to its highest level since March 2011, registering a net balance of +39; three times as many businesses are now confident (57%) as those who are worried (18%). Confidence rose in every state and territory except the ACT, with Tasmania now the most confident state.
While health and community services sector confidence is now 26 points above the national average, falling sales was mentioned most by the worried small to medium businesses in this sector.
In the previous survey, all indicators were unimpressive, especially profitability (-11) with sales also low (+4), the survey says.
This quarter major improvements are expected in sales (+32) and profitability (+14). For the year ahead, sales (+53) and profitability (+40) expectations are the strongest and they are also relatively high for wages (+30), prices (+25) and employment (+15).
Capital expenditure expectations also have a positive net balance (+3) unlike most other sectors.
“Businesses told us that the key factors driving confidence are the specific strengths of their business, growing sales and being well established,” says Sensis CEO John Allan.
“The new Prime Minister has had a positive impact on overall perceptions of the Federal Government and there has also been a halo effect on confidence, with a number of businesses highlighting this as a reason for their views.
“However, the Government still has some work to do to regain the levels of support seen following the popular Federal Budget in May 2015,” Allan says.
He says that employment will be a key areas to watch this year, with 52% of businesses now reporting barriers to taking on new staff.
“Of those, the number reporting a lack of work or sales as the primary concern has risen to 49%,” says Allan.
“One of the concerns mentioned by SMBs was finding and keeping quality staff, with the primary problems being finding staff with the right skills as well as finding people who want to work.”