Business Confidence falls dramatically, but hiring intentions strong

17 April 2013 – Australian business confidence has dropped to its lowest since October 2010, according to a global survey of more than 26,000 companies across 90 countries. Despite this, 84% of businesses are planning to increase or maintain headcount in 2013, according to the latest Regus Business Confidence Index, which included input from 680 Australian businesses.

Other key findings of the report include:

  • Globally, the Regus Business Confidence Index stands at 114 points, up 3 points from October 2012
  • In Australia the Index stands at 105 points, down 11 points from six months ago, representing the largest fall experienced by any of the 14 major economies tracked by the index
  • Despite a fall in confidence, a quarter of Australian businesses (27%) plan to increase headcount by more than 5%
  • 86% of small businesses will maintain or increase headcount, compared to 73% of large businesses

The proportion of companies in Australia reporting revenue increases over the past year fell to 40% compared to 53% six months ago. The number of businesses reporting increasing profits fell from 46% to just 29% in the same period.

Jacqueline Lehmann, Country Manager for Regus, comments: “The fall in national business confidence can in part be attributed to rising costs for businesses driven by the strong dollar and workplace-related spending. However, Australian businesses maintain bullish hiring intentions, meaning that there will be an underlying need for organisations to cut fixed office space costs and drive productivity increases from their staff.”

Industries expecting to significantly ramp up headcounts (by 5% or more) include ICT (42%), Media & Marketing (38%) and Banking and Finance (29%). Across all industries, businesses forecast a marked increase in demand for sales and marketing staff (50%), those working in operations (48%) and administration (18%).

Lehmann says: “Half of businesses believe that there will be increased hiring activity as companies invest in sales & marketing and operations. In particular companies in high-growth industries such as ICT expect to hire more staff, while small businesses also have one eye on growth.

“Businesses of all sizes need to consider how to ramp up productivity while controlling costs, and the key to do this is to maintain agility and flexibility in how they run their operations. We are seeing increasing demand for flexible space across Australia from companies looking for smart ways to grow in a challenging market.”