The March Quarter 2019 Sensis Business Index, released Tuesday 7 May 2019, reveals small and medium business (SMB) confidence levels in Western Australia (WA) have more than halved on the previous quarter results.
The report, which measures SMB activity, expectations and confidence over a three-month period, has found that the net balance for confidence for WA businesses fell 32 points to +20 to sit 14 points below the national average and equal lowest in the country alongside the Northern Territory.
The falling balance also marks the lowest confidence level in almost three years.
Speaking to the result, Sensis Chief Executive Officer John Allan said, “It’s disappointing to see this dramatic dip in confidence levels among small and medium businesses in the West, particularly following optimistic results in the December 2018 quarter report.”
“The crash in confidence points to lower than expected summer sales across the state. However, expectations for the current quarter are all improved and again quite optimistic and we hope to see this reflected in the next report”.
SMBs in Perth became the least confident of all capital city businesses due to a net balance fall of 33 points to +20. Regional confidence also fell significantly, down 30 points to +17, 14 points below the regional average.
“It’s troubling to see such widespread discontent among businesses in the nation’s West, resulting in 31% suffering a severe lack of confidence,” said Mr Allan.
In terms of current perceptions of the economy, the net balance fell 19-points among West Australian SMBs to -15, trailing the national average by 11 points.
“The report shows a concerning 31% of WA small businesses believe the economy to be slowing and 53% think it has stagnated. Just 16% of WA small businesses feel the economy is growing.”
Results were far more positive on balance when looking at WA support for the State Government, which increased six points to +1; the highest level of support for a WA State Government since June 2013. Those positively disposed to the WA Government see it as trying to improve economic conditions, reducing taxes and offering incentives, subsidies and grants.
Support for the Federal Government also increased, up 14 points to sit one point above the national average at +13.
“The results are positive for both the WA and Federal Governments as despite crashing business confidence levels, support continues to grow,” said Mr Allan.
The latest quarter results saw more positive balances recorded for sales and prices. However, profitability became negative while employment and wages were less positive. Current quarter expectations are positive and higher for all five key performance indicators.
“We hope to see the positive expectations develop into increases results in the June 2019 Quarter report,” Mr Allan concluded.