The survey also saw an 18.7 percent rise in the Future Conditions Index, as SMEs expressed optimism towards future business conditions, reflected by positive changes in employment( a net balance of 6.1 percent of SMEs have hired more staff in the last 12 months) and in investment( a net balance of 14.4 percent of SMEs have increased investment in the last 12 months).
SME’ s perceptions of current and future conditions differ significantly by sector, with SMEs in Hospitality & Recreational Services the most optimistic( 138.7). SMEs in Manufacturing remain pessimistic about current conditions( Current Conditions Index reading of 77.1) but are hopeful about the next quarter( Future Conditions Index is 108.6).
Julie added,“ SMEs contribute a little over half of private sector economic activity and are the fastest growing segment in Australian business. They are the heart of our economy and most importantly, have the scale to help fill the gap created by the reducing business activity of traditional sectors.” SMEs remained concerned about Current Conditions( at 78.2) due to weak activity and declining profits. A net balance of 5.2 percent of SMEs saw a decline in real business activity over the last 12 months and a net balance of 17.2 percent reported a decline in profits over the same period. Westpac Senior Economist, Matthew Hassan said there were a number of contributors to the current results.
“ Some of the positive forward view may reflect the lead-in to the Christmas period, a particularly important high season for many retailers and SMEs in the hospitality sector. Expectations have no doubt been buoyed by recent interest rate cuts as well. The survey detail still suggests current conditions are uneven, while growth is continuing; incomes remain a weak spot for the Australian economy that is clearly pressuring SMEs’ profitability. Perhaps the most promising aspect of the survey is the solid rise in employment reported over the last year. It suggests the positive forward view is not just a hope but something small businesses are actively planning for,” said Matthew. When asked about the role of mentors, surprisingly the survey revealed that over 80 percent of Australian SMEs do not have a business mentor and of those that did, the Health & Aged Care Services industry ranked the highest at 40.6 percent.
Julie concluded,“ When speaking with customers we’ ve found the top qualities sought after in a mentor are financial advice and expertise followed by strong business acumen. SMEs know what they are after in a mentor; the challenge is often finding them.
“ Knowing this, we’ ve set out to help Australian businesses looking to take their business to the next level through our Businesses of Tomorrow program, giving a selection of high performing businesses access to some of Australia’ s best www. westpac. com. au
IQ 17