February Small Business Momentum Survey

Small business confidence moderated between January and February, dropping 5 percentage points to 34 per cent. Concerns in response to increases in the official cash rate we expect have contributed to the decline in confidence levels as business face escalating finance costs and fear further reductions in discretionary spending by customers.

The proportion of businesses concerned about the cost of business inputs increased from 76 per cent in January to 89 percent in February as businesses continue to report challenging trading conditions. Inflation and staff shortages continue to be cited as factors weighing on confidence.

Expectations about revenue and profitability weakened in February, with just 14 per cent of businesses expecting profitability to increase over the next three months, down 3 percentage points from January.

Concerns and impacts related to inflation and staff shortages continue to be cited as factors weighing on confidence.