Australian small businesses prepare for rocky 2015: report

Australia's small businesses are bracing themselves for a tough 2015 and are feeling even more pessimistic about the outlook than their large-business counterparts, according to a report released by the Australian Chamber of Commerce and Industry (ACCI) on Monday.

The survey, which reflects actual performance for the December quarter and expected performance for the year ahead, shows that small businesses are gloomy on most key measures of activity.

The index of Expected Economic Performance fell markedly for the fourth consecutive quarter and has now been below a 50 reading for three quarters. A reading below 50 indicates that the mood among respondents is more pessimistic than optimistic.

While businesses of all sizes recorded expected economic performance results below 50, the result was better for large and medium businesses than for small businesses.

Small businesses expect slides in profits, employment, overtime, investment and selling prices, while they expect rises in sales revenue, wages and other costs.

ACCI Chief Executive Kate Carnell said small businesses are the backbone of the Australian economy, and when they are under stress they are less likely to invest, innovate and create jobs.

"Small businesses identified business taxes and government charges as their biggest constraint, followed by insufficient demand, import competition and non-wage labor costs," Carnell said.

"If all levels of government can ease the burden on small businesses, those businesses will be better placed to prosper."

ACCI senior economist Scott Kompo-Harms said the latest survey results show that small business experienced painful trading conditions in the December quarter, with all indicators except for wages and other labor costs in contractionary territory.

"Some small comfort can be taken from the fact that the selling prices, profits, employment and investment indexes all rose, but they all remain mired in negative territory. The improvement would need to continue for some time yet before we could say the outlook of small business has turned to optimism," he said. Endi