Small business increasingly nervous

FEARS are escalating over the bruising impact of Australia's two-speed economy on around two million smaller employers.

FEARS are escalating over the bruising impact of Australia's two-speed economy on around two million smaller employers, as a leading national business survey showed a record divide wedged between small and larger economic players.

The Australian Chamber of Commerce and Industry's August Small Business Survey found that every indicator which was contradictory for small businesses over the June quarter remained in positive territory for large businesses.

These included business conditions, expected economic performance, sales revenue, employment and investment in plant and equipment.

ACCI's Small Business Conditions Index - indicating general trading conditions - fell to 5.5 points below its 47.8 five-year average, to sit at 42.3 in the June quarter, its lowest quarterly level since March 2009.

"The survey starkly reveals that small business performance lags significantly behind its larger counterparts," said ACCI chief executive Peter Anderson.

Westpac chief economist Bill Evans said there would be below-trend growth for the rest of the year amid weak consumer spending growth and higher savings rates as well as poorer residential and non-residential building activity.