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Small business mood subdued amid some signs of improvement

19 August, 2015

The mood among small businesses remained subdued in the June quarter but declines in sentiment have moderated on most measures and some indicators are showing signs of improvement, the latest Australian Chamber of Commerce and Industry Small Business Survey has found.

In the survey of nearly 1,500 small businesses for the June quarter the index on Small Business Conditions fell, marking the fourth consecutive quarter in which the index has declined.

However, the Expected Economic Performance index, which measures small business expectations for the economy, remained flat after falling significantly in the previous three quarters.

The Sales Revenue index recorded a slight rise after three consecutive declines. The index remains in contractionary territory, where it has been since 2009, but expectations are more positive, having risen for two consecutive quarters.

The Profits index also remained steady. The index remains deeply entrenched in negative territory, where it has been since 2007, but expectations for profits were also boosted for a second consecutive quarter.

Kate Carnell AO, CEO of the Australian Chamber, said: "Small businesses are waiting on the sidelines for new opportunities to emerge. It is encouraging that the declines of recent quarters have eased and the outlook appears to have stabilised.

"There is some reason for hope. Sales revenue has broken its streak of declines and the outlook for profits is stronger, even as costs continue to rise. Small businesses still appear reluctant to take on new staff or offer additional hours, indicating a cautious approach."

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