SME confidence saw a slight decline during the September quarter despite steady business conditions, according to NAB.
The major bank’s latest quarterly SME survey found that business confidence eased by five index points to -1 over the period, while business conditions remained unchanged at +4 index points.
New South Wales and Victoria led the nation in terms of business conditions, at +13 and +9 index points respectively.
Queensland (-2 points) and Western Australia (-7 points) remain in negative territory, while South Australia reversed its gains in the June quarter to also be back in negative territory at -8 points.
The survey noted that SME confidence in most states deteriorated during the September quarter, except for Queensland, which remained unchanged.
Business conditions remained strongest in service industries, with the finance sector (+16 points) overtaking property services in the quarter to be the best-performing industry.
Health and accomodation/cafes/restaurants tied with property services in second spot at +9 index points.
“A surprising finisher in the top five was manufacturing, which built on its recent traction to improve by seven points in the quarter from the natural mark,” NAB said. “This represents the best result since mid-2010 and suggests pass-through of stimulatory effects from a lower Australian dollar.”
“It is also worth noting that the retail sector recorded its first positive reading in more than seven years at +1.”
The construction industry had the weakest business conditions for the quarter at -2 index points.
The survey showed that confidence by industry was more mixed, with construction the most confident at + 5 points, while retail confidence fell 16 points to be the weekest at -11 points.