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Small business optimistic before Christmas

AAP logoAAP 19/09/2016

Interest rate cuts and the expectation of stronger sales in the lead-up to Christmas are boosting small and medium size business confidence.

The Westpac-Melbourne Institute SME Index shows confidence jumped 15.2 per cent to a level of 95.6 in the September quarter, from 83.0 in the previous quarter.

The most optimistic sector was hospitality, while manufacturing was the most pessimistic.

Westpac senior economist Matthew Hassan said the confidence had been boosted by this year's two interest rat cuts and hopes for the lead-up to Christmas.

"The survey detail still suggests current conditions are uneven, while growth is continuing; incomes remain a weak spot for the Australian economy (and) that is clearly pressuring SMEs' profitability," he said in a statement.

"Perhaps the most promising aspect of the survey is the solid rise in employment reported over the last year. It suggests the positive forward view is not just a hope but something small businesses are actively planning for."

The index rose by the most in NSW, by 21.6 per cent, while South Australia was the only state to record a decline in the index in the September quarter.

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