Measuring local business success
Australia has always been an entrepreneurial nation, with business the backbone of the economy and the labour force. Now, a new tracking index created by McCrindle Research enables Australia’s 565 local councils to measure the business conditions, performance and sentiment of our nation’s 2.1 million actively trading businesses, 99.5 per cent of which are small-medium enterprises.
External Stress versus Internal Success
The first Business Performance Sentiment Index (PSI) results, featuring 179 business owners from the NSW Hills Shire Council, indicated that businesses face stress in terms of the external factors – the general economic conditions and local infrastructure, with strong concerns about the regulatory burden placed on them:
- 48 per cent of businesses say Australia’s economy is performing worse than six months ago
- 40 per cent indicate that the time and cost spent on compliance, legislation and regulations has increased in the last six months
Rising costs felt by small business
Internally, performance has yielded good revenue and profitability growth over the last 6 months, and 47 per cent of business owners say their sales revenue is better than six months ago. This is coupled, however, with rising costs of doing business:
- 38 per cent say business costs are worse now than 6 months ago, and
- 76 per cent of small business owners (5-19 staff) report an increase in staffing costs in the last six months
Optimistic about performance, uncertain about economic outlook
While 42 per cent of business owners expect Australia’s economy to be performing worse in six months’ time, 52 per cent expect their own revenue to be better, with expectations for profitability growth and increased employment. Three in five (58 per cent) also expect costs to increase.
“The Business PSI is designed to be deployed longitudinally in local and regional geographies, as it measures economic conditions, regulatory settings, and infrastructure in a local context,” explains Mark McCrindle, principal of McCrindle Research.
“Business performance can be measured by region over time to get real-time analysis of local economic conditions, and to see the impact of local policies, investment, and infrastructure development, as well as to measure the impact of state and national issues and economic conditions.”