Australian small businesses are feeling positive about their current and future performance, according to the first Westpac-Melbourne Institute Small Business Index.
The index, based on a survey of 300 businesses around Australia in two weeks in January, is sitting at 119.4, with ratings above 100 indicating businesses are more positive than negative about their outlook for the next three months.
The survey found four in five small businesses (83%) expect their activity and sales to either increase or stay the same over the next three months, while 16% believe their activity and sales will decrease.
“Small business is the backbone of the Australian economy and their sentiment can often be a barometer for the national economy,” Westpac’s general manager for small business, Julie Rynski, says in a statement.
The survey also found that small business optimism remains despite Australia’s current economic position being identified as the number one negative impact on their businesses (35%), followed by “customer relationships and sales” (27%) and “regulation” (23%).
It identified “administration” as one of the top contributors to costs.
One in 10 small businesses indicated in the survey they were intending to seek credit in the next three months, with “finance” cited as the fourth more negative factor impacted small businesses.
The statement says Westpac is looking to inject at least $1.5 billion in new lending to small and medium sized businesses in 2014.
Rynski told StartupSmart businesses can make themselves attractive to banks for loans by having a sound business plan, a clear direction owners want to take the business and have a good credit rating by ensuring things such as utilities bills are paid on time.