Optimism among Melbourne small businesses a surprise to experts

Confidence is returning to Victorian small businesses despite lockdowns, new data shows.

The September Sensis Business Index, released this week, found Melbourne based small businesses were twice as optimistic about the economic outlook for the next 12 month economic than they were a month ago.

The sensis involved 505 business, two thirds of which are based in Melbourne and a further third in regional Victoria and covered ten industries, including wholesale, manufacturing, retail trade and transport/storage.

Of those surveyed, 35% of Melbourne based small businesses believed the state’s economy would be better in 12 months, up from just 17% the month before. When it came to the national economy, 26% reported feeling optimistic it would bounce back, up from 14%.

The uplift in optimism was a surprise to Sensis CEO John Allan, who had expected the extended lockdown would have continued to dampen sentiments.

“Melburnians have been in lockdown for more than 80 days which is longer than the 77 days in Wuhan. But despite that they still have belief in both the Victorian and Federal economies bouncing back,” he said.

Nationally, however, the optimism was not as widespread, with 56% of Australian small businesses stating they felt it would be worse in 12 months than now. This was particularly prevalent among Canberra businesses, with 66% feeling pessimistic, while Perth was the most optimistic, with 50% of businesses anticipating a bounce back.

The sensis also surveyed businesses on the impact of JobKeeper and an alarming 44% reported they would not have survived the pandemic without it. While fluctuations were seen between states and industries, Mr Allan said the importance of the scheme should not be underestimated.

“The overall impact was 44% nationally, but when looking at it from a state perspective, JobKeeper was way more important in Melbourne – at 62% – compared to Hobart, which was nearly half of that at 33%,” Mr Allan said.

“When you look at it from an industry perspective, Hospitality was at 65%, Retail at 42% but Construction was only at 30%.”

Business also believe it will be crucial to emerge from the pandemic and 78% of those in Melbourne said it would be critical to their survival.

Border closures were found to be having a ‘major’ impact on 20% of businesses and ‘somewhat’ of an impact on a further 40%, particularly for those in Sydney and Melbourne.

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