More small businesses confident of profits, NAB survey shows

MORE small businesses are confident about posting a profit in the second half of 2009, the latest National Australia Bank survey shows.

MORE small businesses are confident about posting a profit in the second half of 2009, the latest National Australia Bank survey shows.

The finding comes as the outlook for the domestic economy improves, as NAB’s survey of small and medium enterprises (SMEs) for the June quarter shows.

The report's measure of the outlook for profitability among SMEs improved 28 index points to edge into positive territory at plus-1 point for the quarter.

A reading above zero indicates optimists outnumber pessimists.

NAB business executive general manager Geoff Greer said that while things remained tough for SMEs, the survey represented the “first glimmers of positivity for the future”.

“SME businesses are the real economic drivers in Australia,” Mr Greer said in a statement.

“This will be welcome news to businesses and governments who are hoping that we have turned the corner and are beginning to return to a period of prosperity.”

Mr Greer said recent improvements in consumer confidence, added to the federal government’s stimulus measures, had had a positive impact on the domestic economy and “in turn had a flow-on benefit to SMEs, particularly medium-sized businesses”.

The survey's measure of business confidence among SMEs rose 15 index points to minus-seven points.

Despite the improved outlook for profits, the report found that business conditions among SMEs remained sluggish.

The survey's measure of business conditions rose 2 index points to minus-10 points in the June quarter.

The finance, insurance and retail sectors experienced the strongest improvement in business conditions, while manufacturing and construction companies suffered.

South Australia and Western Australia reported the best business conditions, among Australia’s states and territories. Along with NSW, business conditions in both SA and WA were higher than the national average. Victoria and Queensland were below the national average.


NAB business NSW general manager Jaap Jonkman said the survey results showed that optimism among the state's SMEs was “slowly returning”.

The survey interviewed about 650 companies with an annual turnover of between $2m and $10m.