Green shoots for Australia’s small businesses
Christena Singh | 17 June 2009
The latest Sensis® Business Index has recorded the largest rise in SME confidence in a single quarter since it started 16 years ago. Report author Christena Singh tells us why the good news from small businesses is great news for the Australian economy.
I was at a conference earlier this year just about to present when the speaker before me, Peter Switzer, one of Australia’s most respected small business and financial commentators, put a slide up with a quote from me back in November 2007. It recounted how the Sensis® Business Index had just recorded the largest fall in business confidence for SMEs in a single quarter since the survey started more than 16 years ago.
I can remember the time well, the Australian economy was still looking to be in peak condition, Australia was heading into the last election and while the US economy was already in serious trouble, there was no serious talk that the global economic conditions would impact Australia.
The first significant indicator of economic downturn was picked up in the voices of small business, and this first steep downward movement in confidence heralded one of the most difficult times the Australian economy has experienced in recent history.
So it is great to announce the findings this quarter that the Sensis® Business Index has recorded the largest increase in business confidence in a single quarter. It is great because this is a much needed boost in confidence for Australia’s small businesses, coming from the lowest levels of business confidence on record.
This quarter the Sensis® Business Index recorded a 17 percentage point increase in business confidence, which rose from 13 per cent to 30 per cent. Increases were also recorded in sales, employment, profitability and capital expenditure.
And while the strong improvements are very welcome, it is important to remember that all of these indicators remain in negative territory overall, that is more businesses experienced falls than increases.
There is a long way to go to see these indicators return to healthy positive territory. But the improvements are significant and hopefully signify a sustained rebound in economic conditions, with Australia’s small businesses leading the way.
Small businesses were the first to tell us of economic downturn – small businesses are now telling us that the economy is starting to turn around.
