Survey shows small business struggling

A survey shows small businesses are continuing to struggling with falling prices and profits, while wages keep rising.

The quarterly survey of more than 1,600 small businesses by the Australian Chamber of Commerce and Industry showed a modest dip in conditions from 41.2 in the June quarter to 41.1 in the three months to September.

However, the reading of 41.1 is well below the break-even level of 50 points, and indicates small business conditions are continuing to worsen.

The biggest drags for small business were poor profits, driven by falling prices, while costs such as labour continued to rise.

Small business also had a generally pessimistic view of where the Australian economy would be in a year's time.

"It is alarming that small business growth indicators, such as sales revenue, profit growth and business investments, are approaching their historic low levels previously recorded during the height of the global financial crisis," noted ACCI's chief economist Greg Evans in the report.

"Small businesses have become increasingly concerned that labour costs have continued to rise and remain elevated, despite all other trading indicators trending lower in recent months." Small businesses blamed government for many of their problems, with business taxes and government charges, Federal Government regulations, and state government rules nominated as the top three constraints on investment.

Insufficient demand slipped down the list of constraints from second to fourth, with labour costs ranked fifth and sixth out of 20 factors.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9264-0.0023-0.25%
    AUDUSD=X
    0.5518-0.0017-0.31%
    AUDGBP=X
    0.6701-0.002-0.29%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg