Quarterly SME Survey – March 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.
Seasonal adjustment of SME survey results
SME survey data reported in the March 2012 NAB Quarterly SME Business Survey have been seasonally adjusted for the first time in the history of the survey. There is now sufficient time series data available to determine the seasonality of SME data. While the adjustments may affect the interpretation of individual series, we feel they will be more representative of actual activity and more easily comparable to data for larger businesses reported in the NAB Quarterly Business Survey.
SME confidence & conditions little changed at subdued levels. Small firms continue to under perform their larger counterparts – weakness in retail and construction a consistent theme across all firms.
SMEs reported slightly weaker confidence in the March quarter, although it remained much better than the especially weak sentiment reading in September quarter 2011. Nonetheless, overall confidence remained (slightly) below levels reported by larger businesses in the NAB Quarterly Business Survey. Subdued employment conditions in the early months of this year may have weighed on SMEs, while the partial resolution of European sovereign debt problems in February (via the second round of LTROs) may have helped to alleviate some of the gloom.
SME business conditions were marginally better in the quarter but remained quite weak overall. It appears that the larger firms are weathering the soft economic climate better than the SMEs, where activity has been contracting for the past 12 months.
By industry, confidence improved sharply in finance and was a little better in retail and accommodation, cafes & restaurants, while it weakened heavily in transport, property services and manufacturing. Sentiment was strongest in accommodation, and weakest in retail, wholesale and manufacturing. Confidence weakened modestly in Queensland and SA but was a little better in WA, which is the only state with confidence in positive territory.
Conditions improved solidly in transport, property, health and wholesale but fell sharply in finance, business services and construction. SME conditions are strongest in health services, finance and accommodation, cafes & restaurants and weakest in construction, retail and wholesale. SME conditions in transport, construction, retail and wholesale are considerably weaker than for larger firms in the corresponding industries, while conditions in SME manufacturing (while in negative territory) and finance are better than for larger firms.
Confidence of mid-tier firms ($3-5m p.a.) strengthened in the quarter, with this segment now the least pessimistic of all SMEs. In contrast, confidence of high-tier firms (turnover of $5-10m p.a.) deteriorated. Conditions improved solidly for low-tier firms ($2-3m p.a.) and high-tier firms, but weakened for mid-tier firms.
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