Business conditions among small to medium sized businesses (SMEs) in Western Australia decreased by 13 index points to 19 in the 2008 March quarter, but remain well above the national average of 15 index points, the latest NAB SME survey says.
The quarterly research found that 36 per cent of SMEs in WA reported good to very good conditions, compared to 17 per cent who reported poor to very poor conditions.
Andrew Whitechurch, State General Manager of Business and Private Banking in Western Australia said that despite tougher conditions affecting businesses in other states there were encouraging signs coming from WA.
"It's clear that despite the pressure being felt by all businesses at the moment, Western Australia's SMEs are weathering the storm and are still relatively positive about business conditions in the state," Mr Whitechurch said.
Research divides SMEs into three segments, lower (with a turnover of between $2 million to $3 million per annum), mid (turnover of between $3 million and $5 million per annum) and upper (with a turnover of between $5 million and $10 million per annum).
All three segments reduced their profit expectations, with declines in the small sized SMEs the most noticeable.
"This reduction in profit expectation is a reflection of the rising cost of inputs and a slowing of demand in certain sectors," Mr Whitechurch added.