Business Planning For The Coming Up-Swing

Business confidence amongst small and medium businesses (SMBs) surged in the three months to June 2009 according to a survey of 1800 SMBs by Sensis, whose Business Confidence Index jumped up 18% in the period to now sit at 30%. That’s only slightly below the level recorded in 2008 before the downturn, but only half of what it was in August 2007 when the economy was in full swing.

The survey found confidence was strongest among those with 3-4 employees (42%); next were those with 5-9 employees at 36%; and lowest were businesses employing 100-199. Economists warn that this fits with the “3 waves of debt” theory in which the first wave has already hit big business, the second is washing through medium businesses right now, and the third wave is yet to hit smaller businesses – but it’s coming (read the article titled “Credit Control 101?”)

Despite the pressure on discretionary spending, sentiment is strongest in the accommodation, cafe and restaurant sector (52%); next are health and community services (48%); and the cultural, recreational and personal sector (46%).

The transport and storage sector is the most pessimistic (4%), followed by the manufacturing sector (16%) and retail trade (18%). Data indicates Australia’s economy is rebounding, and businesses are expecting to perform significantly better in the next 12 months. (On this positive note, see “Your Ideal Business Strategy Right Now“).

SMBs are hanging onto staff where they can with only 14% shedding staff during the quarter to June 2009, and 11% actually hiring, while the remaining 75% made no change.

Expect the labour market to start to tighten again as the economic tide starts to swell. If you are looking for good people, act earlier rather than waiting too long. Prepare for good times – even if they are a little late in coming, you’ll still be making more money than you would sitting on your hands until it’s obvious to everyone that we’re back on top again.

Peter Rowe