Business confidence has jumped to its highest level in six and a half years with 2017 predicted as a year of growth but mistrust remained in government policy, according to a Sensis Business Index survey.
Sensis chief executive, John Allan, said improvements in business confidence levels were economy rather than policy driven, as businesses struggled to work through ‘bureaucracy and red tape’ issues.
“While business owners again felt optimistic about their own specific business strengths, it was the improvement in the perceptions of the economy which really drove confidence higher this quarter,” he said.
“The number of businesses worried about excessive bureaucracy and red tape was up this survey and these are the key issues the government needs to address if it is to win over more business owners.”
On the confidence front, the Sensis Business Index (SBI) showed just 15 per cent of small and medium businesses (SMBs), which made up 99 per cent of all Australian businesses in operation, were worried, while over four times that amount (61 per cent) were confident.
All states recorded gains in confidence levels with the exception of Tasmania, down 14 points to +38. Northern Territory (NT) SMBs were the least confidence, yet still jumped seven points to +16, while New South Wales (NSW) remained the most confident location on +54.
The most significant improvement on an industry level was in finance and insurance, up 31 points, while retail trade was the biggest concern, down 23 points due to competitive pressures, costs and lower sales.
Allan said the national improvement in confidence was driven primarily by businesses on the east coast, who had pushed ahead during 2016 despite a global lull, and had not faced the same shifts in industry as west coast states.
“The story in Western Australia and the Northern Territory was very different with businesses there still adjusting to the conditions in the resource sector,” he said.
“This situation has improved somewhat this quarter; perceptions of the economy are now in positive territory for both the short and long-term projections.
“Businesses closed out 2016 on a high, with confidence up seven points for the year and expectations that 2017 will be even stronger.”
Allan said the government would continue play a major role in boosting the confidence of SMBs, where owners continued to struggle with confidence in policy.
“Only the Tasmanian, NT and NSW governments have a positive [policy] rating, with Queensland and South Australian governments still lagging well behind,” he said.
Sensis data also showed that confidence in the state of the national economy had moved into a positive light, jumping 11 points to +3 to record the highest surge in positive perception since December 2013.
