February 2023 Small Business Momentum Survey

Small business confidence picked up a little between December and January, increasing by 8 percentage points to 39 per cent, according to the Commission’s latest small business survey. 

More businesses were confident in their own individual business prospects than those that were worried. There was a similar increase in the number of businesses indicating they were confident in their local economy.

However, the survey was conducted ahead of the RBA’s February rate hike, however, from 3-31 January 2023.

Despite the modest improvement in confidence, businesses continue to report challenging trading conditions. Increasing input costs (including energy, rent and wages), staff shortages, higher interest rates and uneven consumer demand were cited as factors weighing on confidence in January.

• Concerns: 76 per cent of businesses indicated they were concerned about the cost of business inputs.
• Staff: 54 per cent of businesses that have plans to expand are looking to hire additional staff.
• Expansion: 38 per cent of businesses indicated they have plans to grow, alter or expand operations.
• Profitability: 16 per cent expect profitability to increase, compared to 37 per cent expecting a decline.
• Revenue: 23 per cent expect revenue to increase, compared to 26 per cent expecting a decline.
• Local economy: 27 per cent of businesses indicated they were confident about their local economy.

This survey also examined small businesses knowledge and views on the insolvency processes. One in two (44 per cent) indicated they were not at all likely to consider engaging an insolvency professional if they were experiencing cashflow issues.

The Commission has recently made recommendations for improving insolvency processes for small business.