Companies bullish but skills in demand: survey of medium-to-large private companies

A SURVEY of medium-to-large private companies has found most are on track to meet revenue targets this year.

A SURVEY of medium-to-large private companies has found most are on track to meet revenue targets this year, but almost half are experiencing skills shortages.

The bi-annual KPMG Mood of the Market survey found 62 per cent expected to meet their revenue targets for the current financial year, with 59 per cent of respondents expecting general economic activity to expand in the next 6 to 12 months.

However, 43 per cent of companies said they were experiencing skills shortages, much higher than the 25 per cent who reported shortages in August 2009.

About 55 per cent of those said they were planning to employ local staff to meet that shortage, while only 8 per cent said they were looking to hire foreigners.

Fifty-seven per cent of all respondents expected interest rates to rise 0.5 percentage points in the next six months.

"Despite five interest rate rises in the past seven months, and an expectation by almost everyone surveyed that rates will rise again in the next six months, the mood is optimistic," KPMG partner Graeme Matthews said.

On the cost front, 36 per cent of respondents expected rising operating expenses (excluding wages) to be the most significant driver of inflation over the next six months, compared with 25 per cent who indicated wages were the key concern.

The survey also found constraints to capital expenditure had hit private companies in Australia, with 39 per cent experiencing difficulty over the past six months.

"Availability of debt and equity capital, and the price of debt were the main culprits constraining expenditure," Mr Matthews said.

KPMG polled the CEOs and managing directors of 90 private companies.

Thirty-nine per cent had annual turnover between $10 million and $50m, 27 per cent had turnover between $51m and $200m, and 12 per cent had turnover greater than $200m.