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Last Updated:[17-09-2009 08:10:24 EDT] Zoom in Zoom out Back to Tradenews

Australian SMEs Optimistic – Jobs by Next Quarter

tradenews A survey indicated Australian small businesses are confident after two strong quarters of business to reach a record high above the peak confidence level of August 2007. The recent survey by Sensis Business Index, showed confidence of the SMEs had increased by 20 points to 50 percent in the September quarter, and is now at the highest level since the global economic crisis affected businesses in February 2008.

The survey which is available since 1993 provides quarterly business updates of Australian SMEs below 200 employees. It is based on a sample size of 1,800 businesses from metropolitan and regional areas, interviewed between 18 August and 4 September 2009.

Christena Singh, the author of the report acknowledged that the jump was the highest since the inception of the Index. Businesses were expecting their operations to perform significantly better in the next 12 months, added Singh.

65 percent of the participants said they were very optimistic about the coming quarters while 15 percent were sceptical about the same. The report stated that though there was significant improvement in confidence, the real performance did not match the optimism, giving room to doubts in the sustainability of the current economic recovery.

The employment figures too was not in favour of job creation rather it showed a downward trend with 15 percent of SMEs decreasing their workforce size over the quarter and 10 percent increasing staff numbers. From the survey it is clear now the September quarter shaved off more jobs than its previous quarter.

However, majority of the respondents in the survey felt the approaching quarters would definitely see more jobs being created along with the rise in sales and profitability. Many firms have confirmed that they were in the process of expanding the workforce in the next 12 months.

Business confidence was highest in Tasmania and the Northern Territory and lowest in New South Wales. Business confidence has jumped strongly in Western Australia, the largest state, during the quarter and is now above the national average. The optimism of the region has propelled interest in capital goods at a level above the national average.

Most of them surveyed also reported lower profits, while the number of respondents who said their sales rose was equal to the number who saw sales decline. Singh said despite two "strong quarters of improvement", the current economic downturn was still having an impact on SMEs.

By Jose Roy

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