Business outlook cloudy


Balance sheet & calculatorThe business performance outlook and economic confidence of small to medium business operators (SMEs) has fallen in the past six months, according to a report by MYOB.

The result comes despite the majority of respondents overall reporting increased or stable revenue for the last financial year and over one quarter reporting more sales/work than usual in their short term pipeline.

The August 2013 MYOB Business Monitor Report surveyed 1022 SMEs one month prior to the election, the latest survey in a series that has run since 2004.

Less than one quarter expect the domestic economy to improve within 12 months, down from 25 per cent in the March 2013 report.

The proportion expecting an improvement to take one to two years is now 35 per cent, down from 37 per cent. The proportion who think it will take over two years is now 26 per cent, up from 22 per cent.

The dip in economic confidence corresponds with a dip in revenue expectations for this financial year. Only one quarter – 25 per cent – are anticipating a revenue rise, down from 30 per cent six months ago.

Twenty two per cent are expecting a fall, up from 19 per cent, 44 per cent are expecting revenue to be stable and nine per cent weren’t sure.

MYOB CEO, Tim Reed, said he hopes to see a boost in SME confidence with the election verdict now in.

“Our research suggests it will be a slow road to significant improvement in the health of our economy and our business outlook,” Reed said.

“The financial confidence of the country’s small to medium business operators is closely linked to the health of our economy and it is telling us a clear story.

“They see factors at play such as record low interest rates and although many welcome the upside, they recognise it as a sure sign the domestic economy is experiencing slowed growth.

“Political uncertainty in the lead up to the election was likely a strong influence too, with 26 per cent of SMEs saying they didn’t trust any political party more than the other to appropriately manage the economy. Another likely influencing factor is operators having a more realistic picture of their finances after financial year end.”

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