REINVESTING for future business growth is the number one priority for Queensland private business owners, according to financial services giant PriceWaterhouseCoopers (PwC).
PwC private clients partner Jason Daniels, says Queensland is ‘echoing’ national business sentiment focused on investment, positive growth and quality staff recruitment.
Queensland business owners didn’t participate in PwC’s latest biannual national business sentiment survey due to natural disaster disruptions, but qualitative discussion forums with around 150 Queensland businesses were held last month.
“We were keen to hear the voice of private businesses in Queensland but understood they had more important matters to focus on,” says Daniels.
“In late April we asked Queensland private businesses to join us at two open forums to talk about growth, funding, people, business operation and other issues impacting them.
“Nationally, private businesses have turned the funding tap back on and are reinvesting in their businesses for future growth.
“Queensland is no exception they are just working to a slightly different timeline. For them the short term is about finding their feet again and recovery before focussing in the longer term on growth.”
The PwC research showed more than half of the Queensland private businesses surveyed were directly impacted by the natural disasters and nearly a third expect the Queensland economy to feel the effects for the next 12 to 18 months.
“It’s not surprising that private businesses in Queensland have a modest outlook for growth, particularly in the retail sector where competition from new business and overseas is putting pressure on sales, product supply and growth,” says Daniels.
“(But) in the longer term, Queensland private business (owners’) growth aspirations are optimistic. They are looking at ways to ensure their businesses continue to grow, exploring options to compete by buying better, retaining customers and promoting their brand.”
The PwC Private Business Barometer surveys business sentiment across the country for organisations with annual turnover of between $10 and $100 million.
Outside of Queensland, around half of the businesses surveyed were feeling the impact of the natural disasters either through a decrease in demand for services and products or an affected supply chain.
With more than a third of private businesses looking to make significant investments in the short term, the results also show a returned confidence in the banks’ lending conditions.
“Renewed confidence in accessing funds has put banks back in favour,” says Daniels.
“Funding criteria has not lessened, in fact it may have tightened but private businesses are heartened by the focus of the major banks and the development of private banking practices over the past 12 months which better understand and cater to their needs.
“Private businesses want a partnership not just a transactional relationship with their bank.”
PwC Private Business Barometer May 2011 key findings:
- Growth is the key priority for private business across Australia, with respondents expecting sales and profits growth of 13 and 17 per cent respectively over the next 12 months. They tip a jump to 23 per cent in the longer term.
- Nearly three quarters of the businesses surveyed nationally maintained or grew sales in the past 12 months.
- Three out of five businesses met or exceeded their revenue targets. NSW was the strongest performer with 66 per cent of businesses meeting or exceeding their revenue targets.
- Organic growth remains the preferred method of growth at least in the short term, while plans for acquisitions will rise from 20 per cent in the next 12 months to 28 per cent in the longer term.
- The greatest challenge for private business continues to be finding competent staff. Competition on pricing and its effect on margins is the second greatest challenge.
- 21 per cent of businesses making investments will turn to the major banks.
- Average national debt levels are improving having reached 21 per cent, but the optimal average is around 30 per cent.
- 42 per cent of private businesses are struggling with staffing issues, down from 52 per cent last year.
- Two thirds of businesses are looking to hire new staff in the next six months and an average wage increase of six per cent is anticipated by four out of five businesses.
- A record high 94 per cent of businesses are engaging in strategic planning.
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