The small and medium enterprises (SMEs) within the finance and insurance industry showed they would have the highest business confidence levels in the coming months, according to Bankwest’s 2017 Outlook report.
The study, which was aimed to capture the sentiments of the Australian SMEs at the start of the year, also noted that the optimism was driven mostly by strong supply and demand as well as assertive management, while SMEs with lower confidence level indicated to rising costs, economic uncertainty and pressure on profit margins as the main drags.
According to Bankwest Business Sentiment index, which measured Australian business sentiment on a quarterly basis, the overall index was in its neutral territory as optimism about the debt repayment and business prospects for the next three months was offset by concerns over Australian and global economy.
At the same time, medium enterprises displayed greater optimism towards revenue and profit expectations than their small counterparts which, on the other hand, were more confident as far as debt repayment and the industry outlook were concerned.
Despite the economic uncertainty, Australian SMEs were overall in good shape, with three quarters being confident in their overall prospects while close to half expecting an increase in revenue or profit over the next three months, the report said.
Queensland’s SMEs posted the highest level of business confidence in the country, with fourth-fifths of them feeling confident over the next three months and almost a quarter believing the global economy would expand.
Almost 80 per cent of SMEs in New South Wales also showed strong business confidence despite uncertain future, but both Victoria’s and Western Australia’s SMEs were less optimistic about business prospects and below the national average.
The surveyed SMEs also said they saw opportunities in targeting new types of customers in 2017 in the longer term.
The Bankwest’s business sentiment index was aimed to gauge sentiment across four key variables which included business confidence, performance, health, and economic outlook.
The lowest business confidence was recorded among SMEs operating across the agriculture, forestry, fishing, and hunting industries.
