Leading Australian business management solutions provider, MYOB Enterprise Solutions reports that economic confidence among small to medium business operators has sagged to an eight-year low with more than a quarter (26%) not expecting the domestic economy to improve for at least two years.
According to the 2012 MYOB Business Monitor, only 19% of the 1,043 small to medium business owners and managers surveyed nationally expected the economy to improve within the next 12 months, a major drop from the 35% noted in the March 2011 report and 54% in the March 2010 report.
While 20% of the SMEs reported a rise in revenue in the past year, almost twice that number (38%) faced falls and those with steady revenue stood at 39%. Generation Y in the age group of 18-29 years was the generation most likely to experience a positive result with 29% seeing revenue rise, while business owners over 60 years of age were most likely to experience a fall at 41%.
Industries hit the hardest in reporting revenue losses were Construction and Trades (46%) and Manufacturing and Wholesale (45%). On the flipside, Manufacturing and Wholesale was also the industry most likely to see revenues rise (25%), closely followed by Transport, Postal and Warehousing (24%).
According to MYOB CEO Tim Reed said, the survey results paint a stark picture of the financial and emotional challenges facing small to medium business owners, their families and their staff over the next year.
He adds that the majority of SMEs expected to make no change over the next year to their levels of staffing, salaries, investment in R&D, sales promotions and overseas exports, given the lack of confidence in Australia’s short-term economic future.
More than one third intended to increase their focus on customer retention strategies during that time while close to one third intended to increase their attention on customer acquisition strategies.
Key findings of the 2012 MYOB Business Monitor:
- 30% expect their business revenue to rise in the next 12 months with 39% expecting theirs to hold steady
- Almost one quarter (24%) predict a fall in revenue
- 36% of Generation X (30-44 years) expect positive revenue results
- Finance and Insurance leads the way industry-wise with 50% expecting their revenue to rise
- Fuel prices rank first of all the pressure points for business operators, followed by cashflow, interest rates, profitability, tax obligations and attracting new customers
- Nearly one third (29%) had not holidayed since beginning operations
- Dissatisfaction with Federal Government support for businesses has risen significantly from 38% in March 2010 to 52% in March 2012
Two initiatives currently on the table including a new type of business entity that has some of the benefits of a company, yet the simplicity of sole-trader trading, and a tax loss carry-back scheme would be welcomed loudly by a sector that needs measures such as these to make business life a little easier.