June Small Business Momentum Survey

Confidence levels have dropped off the back of another interest rate rise the twelfth since May 2022. A record low of only 7 per cent of businesses expect profitability to increase over the next three months, down another 2 percentage points from May.

The impact of inflation and resulting decline in consumer spending appear to have contributed to the pessimistic outlook.

Off the back of this survey the Commission is again urging small businesses to review business plans and operations to account for higher input and labour costs. Where possible, they should look for savings and efficiencies and be focussed on value conscious consumers.

The cost of business inputs is the top concern for small businesses for a fifteenth consecutive month, with 86 per cent expressing concern. This was followed closely by predicted retail electricity and gas price increases, then cash flow and availability of working capital, with 82 per cent (a record result) and 74 per cent expressing concern respectively.

Increasing input costs (including energy, fuel, materials and wages), staff shortages, higher interest rates, weaker customer demand and economic uncertainty were also cited as factors weighing on confidence in June.