As we continue our journey across the latest SME survey data, today we look at the latest business confidence scores. We ask a series of questions about hiring plans, sales expectations, profit margin, borrowing plans and other factors, and distill this into a relative numeric score. Essentially, the higher the score, the more confident the business. This is important because confidence is directly linked with business investment and jobs creation.
We find that generally businesses who are formed as a company are more confident compared with those who are not; and those willing to borrow are more confident than those who do not.
We also found that businesses with smaller turnover were significantly less confident, compared with those with larger volumes. This is a problem because there are many more business with smaller than larger turnover (note the yellow line – distribution of businesses – is a log scale).
Score by industry varies, with education and training the most positive and mining the least positive.
On a state basis, VIC and NSW businesses are the most confident, whilst those in NT and WA are the least positive.
We also find considerable regional variations, with those closer to a CBD more positive, whilst those in regional and remote areas are less positive.
Finally, we look across our SME segments, we find that career switching start-ups are the least confident, whilst large established firms are most confident.
So, if you are a small business based in regional WA, you are most likely to be feeling less confident about the future of your business, compared with a large established business in VIC or NSW CBD. A Curate’s egg indeed!
Next time we look at SME’s banking relationships.
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