Business confidence improves but outlook remains uncertain

Small business confidence improved towards the end of 2024, increasing by four percentage points to 28 per cent between November and December. Despite the improvement, overall confidence levels remain subdued amidst persistent and challenging trading conditions. Businesses in Greater Sydney were significantly more confident about their prospects than their regional counterparts (30 per cent compared to 26 per cent). 

Business conditions deteriorated in December amid expectations about revenue and profitability declining and concerns about inputs costs increasing. Forty-six per cent of businesses expect a decline in profitability (compared to 12 per cent expecting a rise) and 37 per cent anticipate a decline in revenue (with 16 per cent expecting an increase). Eighty-six per cent of businesses indicated they were concerned about the cost of business inputs, three percentage points above the series average. 

The number of businesses exploring new ways to grow, alter or expand their operations hit a record low in December; this may have been affected by seasonal factors. Business investment decisions relating to hiring staff and capital expenditure also fell in December. 

Looking towards 2025, the outlook of small businesses remains pessimistic – 66 per cent anticipate a difficult trading period ahead. Only 4 per cent of respondents expect 2025 to be an easier year for their business, while the remaining 30 per cent were neutral. 

The NSW Small Business Commission’s Momentum Survey measures business sentiment and issues impacting NSW small businesses.