Business looking up despite economic gloom: Economy roundup

Most small business owners are looking forward to business picking up in the year ahead, but remain pessimistic about the broader economic outlook.

Most small business owners are looking forward to business picking up in the year ahead, but remain pessimistic about the broader economic outlook.

According to an MYOB survey of more than 1600 Australian small business owners, 56% believe their business performance will improve over the next 12 months.

Improved marketing and better customer relationships was the chief reason for optimism given by businesses owners with a positive outlook for next year, while 97% said they also expect cheaper petrol to help their business.

Almost 75% of business owners also said their business is currently performing very or quite well, broadly consistent with results over the past year.

But while they are feeling good about their own chances, business owners see storm clouds looming over the economy as a whole, with 58% saying they expect economic conditions to worsen over the next 12 months, way up from 6% this time last year.

On the markets today, after a volatile morning the S&P/ASX200 moved up 0.3% on yesterday’s close to 5118.6 at 12.20pm.

And the Australian dollar has fallen significantly following yesterday’s CPI result. Although the 4.4% underlying annual inflation rate is way above the Reserve Bank of Australia’s 2% to 3% target band, it was widely perceived as not being high enough to prompt another rate rise. The consequence – the Australian dollar has dropped back to US95.92c.

And while home owners are sweating about the chance of another rate rise, the situation is precisely the reverse in New Zealand – rates there were cut by 0.25% to 8% today.