01/08/2008 - 13:10

WA SMEs perform strongly in June: survey

01/08/2008 - 13:10

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The state's small to medium enterprises are keeping up with their larger counterparts as business conditions continued to further weaken SME's across the country.

The state's small to medium enterprises are keeping up with their larger counterparts as business conditions continued to further weaken SME's across the country.

Research from the latest National Australia Bank SME Survey for the June quarter saw the SME index drop seven points to eight index points.

Nationally, small enterprises with an annual turnover of between $2-3 million were the worst affected at 0 index points, while mid-sized SMEs faired slightly better with business conditions at nine index points.

Large SMEs with an annual turnover of between $5-10 million reported the most positive business conditions at 11 index points.

The survey revealed WA and to a lesser extent Victoria and South Australia reporting relatively strong business conditions in the quarter, with all three states recording conditions above the national average.

WA recorded business conditions of 22 index points while Victoria was at 14 points and South Australia at 13 points.

Queensland reported an average performance while New South Wales turned poort to remain the weakest state for SMEs.

"SMEs on average reported stronger conditions than their larger business counterparts. This
outperformance was particularly evident in Victoria, Queensland and to a lesser extent, SA
& NSW," the survey said.

"SMEs in WA performed in line with their larger counterparts."

Nationally, 27 per cent of SME's reported good or very good conditions compared to 19 per cent that reported poor or very poor conditions.

"It is clear that regardless of size, all SMEs are feeling the effects of a weakening level of consumer confidence, increasing input costs and concern about the rate of economic growth," regional general manager of NAB's Business Banking Australia Geoff Greer said.

"Whilst SMEs are still faring better than their larger counterparts, they will be paying close attention to the Reserve Bank's interest rate decision on Tuesday. Any increase will add further pressure and business confidence may fall as a result.

"But it isn't all doom and gloom. There are sectors of the economy that are bucking the trend. SMEs operating in the health, finance and insurance markets reported the strongest conditions in the June quarter.

"Other sectors however, particularly those more reliant on consumer spending, are not doing so well. Businesses operating in the hospitality, personal/household goods retailing, housing construction and chemical manufacturing all reported poor conditions."

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