Small and medium businesses see strength in the economy, according to the latest Sensis Business Index (SBI), with the hospitality sector recording a significant lift in confidence to lead other industries.

The SBI did find that the retail sector found the toughest conditions in the last quarter, while there was more confidence in metro regions.

The report highlighted that the last quarter sales performance for the hospitality sector was good and the expectations for the current quarter remain positive.

The report said: “Confidence in the Hospitality sector almost tripled with the net balance jumping from +21 to +62. This is now the most confident sector.

“Specific business strengths followed by having an established, solid business drove confidence, while an unfavourable business environment is the key issue for those who are worried.

“Last quarter sales (+12) were relatively good but profitability (-3) and employment (-5) balances were negative. Other key indicator results were positive: prices (+23) and wages (+7).

“This quarter, expectations are positive and above average for all key indicators except profitability (+14). The balances recorded for the other indicators were: prices (+28), sales (+22), wages (+22) and employment (+14).”

In terms of the retail trade, the report said that while expectations are positive, this is “by far the least confident sector”.

“An unfavourable business environment is the leading cause of pessimism, with lower sales and cost pressures also influential. Being an established, solid business, having specific business strengths and a favourable business environment each played a role in influencing those retailers expressing confidence.”

Speaking about the overall findings of the September quarter’s report, John Allan the CEO of Sensis, said: “Australia’s economic fortunes appear to be on the up, with the past four quarters of the Sensis Business Index (SBI), including this one, revealing a positive outlook towards the economy among Australia’s small and medium businesses (SMBs). In fact, this level of optimism has not been seen since December 2013 with more businesses saying they believe the economy is growing (25 per cent) than slowing (16 per cent) for a positive net balance of +9.

“Small and medium businesses see strength in the economy and this is revealed in their assessment of each of the key indicators, all of which – prices, sales, profitability, employment and wages – saw a rise in the net balance score both for last quarter and in expectations for the quarter ahead.

“Not only are businesses confident about the economy generally, but they are also confident about their own specific business strengths, with the business confidence score up seven points to sit at the equal highest level since March 2010.

“As we head into the crucial Christmas period – especially for the Hospitality; Cultural, Recreational and Personal Services; and Retail sectors – we hope this level of optimism is maintained.”

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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