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Westpac: Small Business Outlook Positive For Next Six Months

Small businesses confident despite tight labour market

By Michelle Hammond
Friday, 13 May 2011

A new survey reveals 57% of small businesses predict a stronger business performance in the next six months, despite research that suggests employers could struggle to recruit and retain talent.


A Westpac survey of 2,500 small businesses reveals 54% expect to meet profit targets over the next six months, while 25% expect to exceed those targets.


“Business owners have a relatively positive sentiment. Two thirds think business performance is good and 60% are happy as business owners, although more than a third think running a business is more difficult than previously,” the survey says.


The survey provides a breakdown of the most difficult financial factors in running a business, with 32% identifying the management of cashflow, while 29% identify managing costs and overheads.


This is followed by business tax provisions, managing debtors, determining prices, access to finance, management of GST, managing employee entitlements, and budgeting.


While financial factors are of ongoing concern to small business owners, the survey reveals positive customer relationships and achieving personal goals are among the factors positively influencing their happiness.


An integral part of the survey is the Happiness Index, with small business owners in Victoria, WA and the ACT ranking higher than the national score of 60, while businesses in Queensland, Tasmania and the Northern Territory fell below the national level.


Sian Lewis, Westpac general manager of the SME segment, says even though Queensland is still struggling in the wake of floods and Cyclone Yasi, it registered a happiness score of 58, falling just two points short of the national average


“This shows a particular resilience in the Queensland business community – I would have expected them to be a little more off the pace,” Lewis says.


Meanwhile, another new report reveals labour mobility in Australia has hit a 12-month high as the unemployment rate remains at a record low 4.9%.


The research, by recruitment company Randstad, claims Australians are among the most optimistic in the world about finding a job, with the mobility index rising four points since the last quarter to 111.


According to Randstad, 11% of Australian workers say they are actively looking for a new job, with only 5% concerned they might lose their current job.


Randstad chief executive Fred van der Tang says the combination of a tight labour market and a skills shortage is creating fierce competition as employers battle to attract and retain the best talent.


“Such warfare generally encourages mobility as employees are lured into the job market by increasing wages and more attractive employment packages. Suddenly, the grass begins to look a lot greener on the other side,” van der Tang says.


He says 2011 is shaping up to be a jobseeker’s market, putting pressure on employers to provide employee incentives.

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