SMEs confident heading into 2017

SMEs are positive about business conditions over the coming year.

January is just around the corner, and many SMEs will be considering what changes they can make to ensure 2017 is a successful year for their operation.

The Australian government was hardly full of Christmas cheer earlier this week after revealing it would be downgrading its economic growth forecasts due to stagnation in wages and company profits.

However, SMEs remain confident that the new year will be a profitable one, with several recent studies showing business owners are optimistic despite a recent slowdown in conditions.

Business confidence eases but remains high

The latest NAB Quarterly SME Business Survey found business confidence had eased slightly to +5, but this was notably higher than the long-term average of +2. Similarly, business conditions dropped to +5, slightly higher than the +4 long-term average.

"Australia's start up community is continuing to fuel growth for the Australian economy."

Meanwhile, the MYOB Business Monitor, published on 15 December, showed nearly two-thirds of SMEs believe the economy will either improve or remain the same in 2017.

Organisations also reported an improvement in performance since the July Business Monitor, with 27 per cent of respondents saying revenues had increased – up from 21 per cent.

"Australia's start-up community is continuing to fuel growth for the Australian economy, with some 42 per cent of start-ups and 35 per cent of establishing businesses reporting revenue increases," said MYOB CEO Tim Reed.

"Rural businesses also returned a strong showing with 37 per cent achieving revenue growth."

The year ahead

Looking towards the first quarter of 2017, Dun & Bradstreet's Business Expectations Survey said companies believe they will begin the new year positively.

Goods and services sales are expected to remain at high levels, and predicted profits, capital expenditure, selling prices and employment are all forecast to rise.

Business services at WMC Accounting. Small businesses are confident about their growth in 2017.

"It appears that the business sector is responding to the positive effects of record-low interest rates, a still-favourable global economic environment, including the recent lift in commodity prices, and ongoing momentum from exports, construction and services," said Stephen Koukoulas, economics adviser to Dun & Bradstreet. 

Nevertheless, there are still some causes for concern in 2017. Expectations for the whole year are less certain than the early months. Dun & Bradstreet found 50.2 per cent of businesses were more optimistic about their growth over the next 12 months, which has dropped from 63.4 per cent in October.

Businesses may need to examine their operations closely to see if there are areas for improvement to ensure they take advantage of opportunities over the coming year. 

Are you worried about your organisation's growth in 2017? Speak to the team at WMC Accounting to learn more about our wide range of business services.

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