Small business confidence rebounds

Confidence among small businesses has rebounded in the June quarter, with their growth expectations hitting a two-year high. 

According to ANZ’s Business Micro Scope survey, 17 per cent of small firms are confident about business conditions over the year ahead, up from 14 per cent in the March quarter. 

The rise in confidence is mirrored in other key indicators for small business sentiment and activity tracked by the survey. 

The ANZ composite measure – a key proxy for growth based on a firm’s own activity outlook, hiring, investment and profit expectations – improved to +22, its highest since the first quarter in 2015. The most positive outlook was from intermediate businesses (six to 20 staff) which edged up from +27 to +29, while micro businesses (up to five staff) held at +15.

“As we approach the middle of the year, small businesses are increasingly upbeat about investment, employment and profit expectations,” ANZ managing director of retail and business banking, Antonia Watson said. 

“Profit expectations are particularly strong with a net 28 per cent of small firms expecting higher profits on the horizon – the highest for the past three years and a sentiment shared by businesses across a broad range of sectors.”

However, the quarterly survey again highlighted a significant problem holding back small business was a shortage of skilled labour with 23 per cent of small businesses reported a lack of skilled employees as their biggest problem, followed closely by regulation on 22 per cent. 

According to the survey, lack of skilled staff, regulation, competition and low turnover are the top of small business owners’ concerns. 

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