Private businesses starting to feel credit crunch
(14 October 2008 – Australia) The latest edition of PricewaterhouseCoopers’ Private Business Barometer tells a different story to its predecessors. Global and domestic economic uncertainty is prompting private business with turnover of A$10 million-A$100 million to rein in investment, slow hiring, reduce short-term forecasts and generally prepare for less buoyant economic times in the near future.
The Barometer is based on direct interviews conducted by East & Partners with
a natural sample of 750 private businesses turning over between $A10 and A$100
million. Since its launch in May 2007 the Barometer has become a regular,
authoritative fixture on the calendar of private business owners, senior
executives, analysts, media and government policy makers.
The fourth edition of the Barometer, released today, is based on interviews conducted during the month of August 2008. Some of the key findings from this latest edition of the Barometer include:
Key findings from Barometer IV:
Profit and sales growth rates slips: Average profit growth rates for the previous 12 months fell from 11.3 per cent in August 2007 to 10.4 per cent in August 2008, while average sales growth rates for the previous 12 months fell from 13.2 per cent in August 2007 to 10.9 per cents in August 2008.
Credit crunch bites: Just over two-thirds (66.8 per cent) of businesses identified availability of credit as a potential impediment to meeting targets in the next 12 months, up from 51.2 per cent just six months earlier.
Hiring falls: Only 26.7 per cent of businesses intended to hire additional employees, down from 46.1 per cent in August 2007.
Medium-term outlook still positive: One-year growth targets are down but three-year targets remain robust.
WA and Queensland performing strongly: Solid sales enabled private businesses based in Western Australia and Queensland to beat revenue targets and record healthy profits.
Bricks and Mortar on the line: Nearly two-thirds (64.6 per cent) of private businesses use personal bricks and mortar (the family home) as security to obtain business finance.
Management reporting lags: More than half (55 per cent) of businesses compromise their ability to act quickly and decisively by failing to complete management accounting reports within a week of month-end. A further 4.2 per cent are either unsure or vary in time required to complete these reports.
Your free copy of the Barometer can be downloaded here.
For more information about the latest edition of the Barometer or to listen to an audiocast about the findings, please visit www.pwc.com/au/pcs
The fourth edition of the Barometer, released today, is based on interviews conducted during the month of August 2008. Some of the key findings from this latest edition of the Barometer include:
Key findings from Barometer IV:
Profit and sales growth rates slips: Average profit growth rates for the previous 12 months fell from 11.3 per cent in August 2007 to 10.4 per cent in August 2008, while average sales growth rates for the previous 12 months fell from 13.2 per cent in August 2007 to 10.9 per cents in August 2008.
Credit crunch bites: Just over two-thirds (66.8 per cent) of businesses identified availability of credit as a potential impediment to meeting targets in the next 12 months, up from 51.2 per cent just six months earlier.
Hiring falls: Only 26.7 per cent of businesses intended to hire additional employees, down from 46.1 per cent in August 2007.
Medium-term outlook still positive: One-year growth targets are down but three-year targets remain robust.
WA and Queensland performing strongly: Solid sales enabled private businesses based in Western Australia and Queensland to beat revenue targets and record healthy profits.
Bricks and Mortar on the line: Nearly two-thirds (64.6 per cent) of private businesses use personal bricks and mortar (the family home) as security to obtain business finance.
Management reporting lags: More than half (55 per cent) of businesses compromise their ability to act quickly and decisively by failing to complete management accounting reports within a week of month-end. A further 4.2 per cent are either unsure or vary in time required to complete these reports.
Your free copy of the Barometer can be downloaded here.
For more information about the latest edition of the Barometer or to listen to an audiocast about the findings, please visit www.pwc.com/au/pcs
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