Revenue and profit expectations recover marginally

There was a moderate improvement in the outlook for small business revenue and profitability between December and January, coinciding with the Christmas holiday period, according to the latest Small Business Momentum Survey. The percentage of businesses expecting profitability to increase rose by 7 percentage points to 17 per cent, and the revenue figure rose from 15 per cent to 22 per cent. 

Despite this, business confidence dropped by two percentage points to 31 per cent, with many businesses citing rising input costs such as fuel, insurance, materials, rent, wages and utilities as ongoing pain points. This is the 22nd consecutive month that the cost of business inputs has been reported as the top concern. 

Freight costs are also a major concern with approximately 30 per cent of survey respondents reporting that they have been impacted by disruptions at ports. This includes rising freight charges, customs costs, shipment delays and their resulting supply chain disruptions.

Predicted retail electricity and gas price increases remain the second-greatest concern (72 per cent of businesses), while worries about red tape have overtaken concerns around cash flow and the level of customer demand, with 68 per cent of businesses identifying red tape as an issue in this survey.