Quarterly SME Survey – June 2012
The NAB Quarterly SME Survey covers conditions in small, medium and emerging businesses (SMEs) across all parts of the non-farm […]
The NAB Quarterly SME Survey covers conditions in small, medium and emerging businesses (SMEs) across all parts of the non-farm business sector in Australia.
SME confidence & conditions deteriorate further. Weakness in small firms increasingly pronounced compared to their larger counterparts – weakness in manufacturing, retail and construction a persistent theme across all small firm sizes.
SMEs business confidence faltered markedly in the June quarter, though it remained a little better than the particularly weak sentiment reading in September quarter 2011. The overall level of SME confidence was below levels reported by larger businesses in the NAB Quarterly Business Survey. The deterioration in the global economic outlook and the prospect of new taxes at home may be weighing on SME’s sentiment. The recent rate cuts appear to have provided little relief to small business owners, thus far.
SME business conditions deteriorated notably in the quarter and continued to under perform their larger counterparts. The weakness in activity largely reflected subdued employment conditions and profitability; trading conditions held up a little better, possibly aided by the tax compensation to households provided by the government through May and June. Profitability of the smallest SMEs now below GFC levels.
By industry, confidence deteriorated heavily in business services, accommodation, cafes & restaurants and health, while it improved marginally in retail and transport. Sentiment was least subdued in property services and accommodation, cafes & restaurants, while it was worryingly weak in wholesale and health. Confidence weakened across all states, with particularly sharp declines in Victoria and SA.
Conditions weakened considerably in health, manufacturing and property services, while they improved marginally in construction, business services, accommodation, cafes & restaurants and retail. SME conditions were strongest in accommodation, cafes & restaurants, health and finance, and weakest in wholesale, manufacturing and retail. Conditions of smaller finance and business service industries performed solidly and outperformed larger firms in the corresponding industries. Conditions fell heavily in NSW – where they were weakest – while activity generally held up better in the mining states (WA and Queensland).
Confidence of mid-tier ($3-5m p.a.) and high-tier ($5-10m p.a.) firms deteriorated to very poor levels in the quarter, while confidence of low-tier firms ($2-3m p.a.) improved marginally, albeit remained weak. Conditions of low-tier and high-tier firms weakened significantly, while they were unchanged for mid-tier firms
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