- Regus and CBA business confidence reports released
- Large businesses more confident than SMEs
- Retail confidence surprisingly strong
By Andrew Nelson
Two business confidence surveys hit the street yesterday and what they show is that while times may be tough, Australian businesses remain optimistic.
We'll start off with the release of the Regus Business Confidence Index, based on a survey of more than 24,000 senior managers and business leaders across 92 countries. The latest results show that business confidence levels in Australia have remained positive since the last survey in April 2012. In fact, the overall confidence read has lifted by two points from 114 to 116.
Yet while Australian confidence improved, the global business confidence read actually declined over the past six months, dropping from 113 to 111 on the survey index. The UK read is well short of Australia, sitting at 94 points, while the US read of 107 is also well lower than Australia's.
The report indicates the proportion of companies in Australia reporting revenue increases over the past year improved, climbing to 53% compared to 46% in April 2012. Australian companies reporting profit growth also increased, up to 48% from 40% in April 2012.
However, the report also showed a few areas that should be concerning to Australians, with business confidence in key trading partner China down from 130 to 110 since April. This could well have implications for demand levels of Australian exports, especially if the Chinese economy continues to soften towards the end of 2012.
Jacqueline Lehmann, Regus' Country Head for Australia also sees another emerging issue, a widening confidence gap between SMEs and large businesses. The report notes that SMEs are far less confident than their larger peers, with small business confidence at 108 on the BCI compared to 138 for large businesses.
"This is concerning given the important role of SMEs as an engine of growth and provider of jobs. We expect to see further trends towards flexible services from both small and large companies, as businesses are seeking to be more agile and free-up cash for investment without relying on credit at a time when it is so difficult to secure," said Lehmann.
Commonwealth Bank's latest report on Australian business confidence levels, also out today, reads like a fairly similar story. This survey focuses on mid-market companies (turnover between $10-100m), rather than the entire marketplace.