Business confidence lowest in 23 years
Business outlook on profitability has hit a 23-year low for the December quarter, but Small Business Minister Bruce Billson says there are plenty of positive “green shoots” to give the small business community confidence in 2015.
The latest Australian Chamber of Commerce and Industry Survey of Investor Confidence shows businesses had a tough Christmas period and have a gloomy outlook for the year ahead.
The survey’s 641 respondents, mainly from the construction and manufacturing industries, said conditions in their own businesses had fallen further into negative territory, from 49.5 to 48.6 over the December quarter. Sales and profits indicators also dipped for the quarter.
Outlook on profitability hit its lowest level in 23 years, drastically falling from 44.4 to 41.7 in the December quarter. The profitability index has remained in negative territory since the global financial crisis, but has tumbled steeply over the last two quarters.
Businesses’ expectations for their own prospects are also on a downward slide, with respondents saying they are pessimistic about the prospects for broader economic growth and the general investment climate.
ACCI chief executive Kate Carnell used the results to call on the federal government to act.
"We need the government, and the Parliament to act to restore business confidence by fixing the budget and undertaking productivity-enhancing structural reforms,” Carnell said in a statement.
Billson said this morning Carnell’s comments point to the need for Parliament to be more constructive and collaborative around budget repair.
“I think you’ll find the political climate quite unsettled for the business community,” says Billson.
And Billson blames Labor’s “negativity” for the downturn in confidence.
“Labor has returned to type as a party of protest. Bill Shorten has proved he is a purveyor of pessimism. They are creating uncertainty and undermining the surefootedness that the business community needs,” Billson says.
“This [survey] is a wake-up call to the Labor opposition. There is too much at stake to be playing short-term populism.”
Billson urges the small business community to look at several economic “green shoots”, including rising job numbers, recent trade agreements and retail trade figures for Christmas.
“The survey also highlights that many businesses are faring better than anticipated,” says Billson.
“Focusing exclusively on the negative suffocates news that, I certainly feel, adds to optimism about the new year,” he says.
This article first appeared on SmartCompany.