Tough quarter for NSW small and medium business results in falling confidence

The March Quarter Sensis Business Index, released Tuesday 7 May 2019, reveals small and medium business (SMB) confidence fell across New South Wales for the fourth consecutive quarter, falling seven points to +35. This is one point above the national average.

The report, which measures SMB activity, expectations and confidence over a three-month period, found confidence levels among NSW SMBs fell seven points on the last quarter to a net balance of +35.

Speaking to the results, Sensis Chief Executive Officer John Allan said, “The March (2019) Quarter Sensis Business Index report reveals that despite falls in confidence in NSW, it remains positive on balance and a point above the national average to suggest widespread confidence.”

Sydney SMBs were once again more confident than their regional counterparts, however both scores declined. Sydney fell 12 points to +39, remaining four points above the national metropolitan average while regional NSW dropped three points to +25, six points below the regional average.

The falls in NSW were echoed across the country, with SMB confidence declining in each state or territory except South Australia to reach the lowest level in three years.

“While it’s concerning to see falls in confidence levels across Sydney and regional NSW, gains in expectations for the next three months across the key performance indicators suggest perceptions may shift,” said Mr Allan.

Expectation balances lifted in sales (up 12 points to +23), employment (up three points to +8), wages (up 11 points to +17) and profitability (up 20 points to +25). Prices suffered a fall of four points however remain positive on balance (+9).

Results were also positive for the NSW State Government, with SMBs support ratings increasing a point to +3, sitting among the higher scores witnessed across the nation.

Of those in favour of the NSW Government, their positivity was driven by infrastructure development, followed by small business management training schemes. The primary criticism centred around a lack of policies and direction for small business, too much focus on big business and excessive bureaucracy.

SMB support for the Federal Government also increased across NSW during the March 2019 quarter, up 16 points to +15, becoming the third highest rating recorded across the states and territories. Close to one in two NSW SMBs (47%) said they are likely to support the Liberal National Coalition in the upcoming election.

“Support for the Federal Government continued to rise across NSW during the quarter,” said Mr Allan.

“This is a positive performance by the Government in the lead up to the election, with 21% of SMBs across NSW believing tax cuts and policies were beneficial to them, driving the rise in support,” Mr Allan concluded.

Source: Sensis