Lower Hunter Business Performance Sentiment Index
The Auto Advantage team works with many local and regional business advisers and specialists. Most recently, Maxim Accounting and Business Advisors released a report that explored current business sentiment within the lower Hunter. We are pleased to share some of the findings.
The Business Performance Sentiment Index (Business PSI) is an ongoing measure of business conditions, performance and sentiment.
As explained in the Business PSI, the lower Hunter region continues to show consistent growth and optimistic outlook. Statistics show that one in three households (34%) own their own home outright, compared to 32% in NSW and 31% in Australia.
This year’s results show that the positive operating conditions for businesses in the Lower Hunter have increased since last year. Performance in the region has dipped marginally in its score, however, the outlook for business activity has grown and remains buoyant.
The Lower Hunter region makes up 1.6% of Australia’s 2,171,544 businesses and almost all of the businesses within this region are Non-Employing (55%), Micro (31%), or small business (12%), each employing less than 20 employees.
Business owners within the lower hunter were asked to describe the most significant challenge that their business is currently facing. A quarter of owners identified challenges relating to human resources (25%) with the majority of owners and managers facing staffing challenges stating that finding and retaining high quality staff is the most significant challenge facing their business. The next highest reported challenge was the struggle of managing company finance (22%). These challenges included rising raw costs, maintaining cash flow, and finding capital for expansion. Regulation came in as third (18%), with restrictive regulation, slow approval processes, a lack of support for new initiatives and a lack of political stability leading to uncertainty regarding the future business environment. The fourth biggest challenge was competition and growth (10%) with many businesses finding increased competition both locally and internationally. The last notable challenge related to technology and internet (6%). Some respondents are concerned with keeping up with technological change, suggesting that upgrading IT systems is a key challenge for their business. Reliable internet is seen to be vital for effective business operations and some owners and managers are unhappy with recently installed NBN systems.
The greatest struggles for businesses in the Lower Hunter are financial. Financial hurdles identified by the PSI were declining pre-tax profits, constrained business cash flow and rising staff costs. These challenges are offset, however, with the expectation of businesses expansion in 2018 and this positive sentiment in the Lower Hunter economy is the dominant theme in this year’s Business PSI report.
Read the full report by McCrindle Research and Maxim Accounting and Business Advisors here
or visit www.maximaccounting.com.au to hear more from the Maxim team.