SME confidence steady: NAB

SME conditions and confidence was largely unchanged in Australia over the March quarter.

The latest business survey from NAB showed SME business conditions continued at around +2 index points, while SME confidence remained marginally positive and unchanged from the previous quarter.

Business conditions in Victoria enjoyed a surge in both conditions and confidence and emerged as the top in both measures, while New South Wales also recorded positive conditions and confidence in the quarter, according to the report.

Western Australia conditions and confidence have deteriorated further to be the weakest in both measures, followed by Queensland.

“SME conditions and confidence appear to have stabilised in the last quarter,” NAB chief economist Alan Oster said.

“However if you analyse the data by the size of SME businesses, we continue to see low-tiered firms underperforming relative to their larger counterparts.”

Business conditions for finance were mixed across industries, rising in the quarter to be at +17 index points – the highest in level terms across all industries.

This is followed by business services and property sectors, which also recorded robust conditions readings, while wholesale, transport, construction and retail remain the underperformers.

In terms of business confidence, property and manufacturing firms are the most confident, while health firms slid further down the scale to be the least confident sector at -20 index points, according to the survey.

Transport firms experienced the sharpest decline of 13 points to -4.

Meanwhile, SME capacity utilisation fell only marginally to 78.7 per cent in the March quarter, which was in line with generally stable conditions and confidence in the quarter, according to the report.

By industry, capital expenditure was the strongest in the finance sector at +20 points, followed by property services at +14 points and transport services at +12 points, while construction, at -2 points, was the main detractor for the index.

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