So, what’s happened to confidence in the economy and business conditions compared to the same time 12 months ago?

The first thing to say is we have captured the sentiment of Australian business leaders emerging from the Covid-19 pandemic, cautiously optimistic that the future is improving! How different would our survey results have looked if we had surveyed during the most severe “lockdown” restrictions with complex and uncertain business conditions in June?

With that said, 75% of our respondents are optimistic (cautiously to very) that the growth prospects of their businesses will significantly improve and grow over the next 12 months. The other 25% of our respondents expect to face difficult conditions—this is in comparison to 12 months ago, where only a small proportion of respondents (10%) expected to face difficult conditions. 54% of our respondents are cautiously optimistic, compared to almost all our respondents last year (90%). So, a higher proportion expects difficult conditions and a higher proportion expect significant growth.

Key points from our recent business conditions survey are:

• There is a noticeable polarisation of expectations for businesses – a greater proportion expected to grow significantly, and a greater proportion expect to face difficult business conditions
• More than 40% of our respondents expect the economy to grow over the next 12 months – but we are coming off a low base
• Almost 20% of our respondents expect revenue to grow more than 20%
• Over two-thirds of our respondents expect their profit margin to stay the same or decrease (21% expect their profit margin to decrease!)
• 75% of respondents do not expect to have a skills shortage moving forward – a similar response to last year but significantly down from past years
• 60% of our respondents expect to significantly increase their revenues over the next 3 years
• “Only” 4% of businesses expect their employee numbers to reduce over the next 12 months!

So, certainly not optimistic! But not pessimistic! A number of our respondents expect to continue to grow into next year and beyond.

Not surprisingly, the proportion of firms expecting price increases continues to reduce. And ominously there is now a proportion of respondents that expect to decrease their pricing. One-third of our respondents don’t expect to increase their fees (compared to 10% last year) and salary levels will only increase moderately (if at all).

This year, the full results report will only be made available to survey participants. However, if you would like to request a copy of the results, please contact Management for Design Founding Director Robert Peake — rpeake@m4d.com.au.