Asia Pacific Survey

Asia Pacific Survey shows Australian businesses still in wait-and-see mode

Date issued: 11 December 2012

“Extreme caution” remain by-words for Australian small businesses, with low confidence levels the norm in comparison to most of their regional counterparts, the latest CPA Australia Asia-Pacific Small Business Survey (PDF) has shown.

The survey shows that the outlook for businesses, especially those in Australia and Hong Kong, remains downbeat and reflect continuing uncertainty about the prevailing economic climate. This is in stark contrast to sentiment among Indonesian businesses, where the mood is buoyant with high growth expectations for individual businesses and for the broader economy.

The survey also shows contrasts between sectors. Businesses in the mining, rental and finance sectors across all markets, for example, were generally more positive about their prospects than their counterparts in the construction sector.

CPA Australia has developed a five-step fact sheet to help business address some of the issues highlighted in the survey results. It has also produced a list of reform priorities for government, through which it can work with small businesses to drive growth, competitiveness and prosperity.

Businesses were surveyed on a range of key issues including access to finance, employment, business management practices and overall confidence levels. Those based in mature economies (Australia, Hong Kong and New Zealand) tended to be the least optimistic on most measures.

Conducted with over 1700 respondents in six Asia-Pacific economies (Australia, Hong Kong, Indonesia, Malaysia, New Zealand and Singapore), key findings in The CPA Australia Asia-Pacific Small Business Survey 2012 include:

  • Australian and Hong Kong small business operators (60 and 59 per cent respectively) are least likely to expect their businesses to grow in the coming year. These figures almost mirror those recorded at the height of the global financial crisis
  • Australian businesses are more likely to expect the Australian economy to shrink in 2013 than grow
  • to those Australian businesses that experienced difficulty accessing finance, 43 per cent cited compliance as a reason for this difficulty
  • forty-seven per cent of Australian business operators used personal credit cards to finance business activities over the past year, compared to 12 per cent for Indonesian businesses
  • fourteen per cent of Australian businesses increased their number of employees in 2012, compared to 61 per cent in Indonesia
  • businesses in Australia and New Zealand are far less likely to source financing from family and friends than those in the four other markets surveyed.

“‘The survey results paint a compelling and in many ways, worrying picture of the state of this key component of the economy,” says CPA Australia CEO Alex Malley.

“Yet again, in Australia and other markets, small business is acting as a barometer for the broader economy. It reflects continuing uncertainty about the domestic, regional and global outlook.

“These results reflect the direct impact of decisions around significant national issues such as returning the Budget surplus, productivity, tax reform and regulation.

The survey results should act as a further wake up call to key decision makers, of the need to focus on how Australia could be best positioned to thrive in a hyper competitive regional and global environment. A large part of achieving this will be predicated on the existence of a dynamic, innovative small business sector with a focus on the high end knowledge economy. Achieving this will require a combined effort by business and government.

“The results shine yet another spotlight on the uneven nature of Australia’s stuttering economy. Broadly speaking, Australian small businesses appear to be in a holding pattern at best and the more positive are generally in sectors located in the fast lane of our two-speed economy.

“The results show that in addition to broader economic uncertainty, small businesses are experiencing difficulty with perennial issues including access to finance and business management. This underscores the need for small business to concentrate more on the business basics and developing and implementing strategy, which is key to long-term growth.

Business confidence ranking table


Description Market *Business growth expectation %
1 Indonesia 94
2 Malaysia 87
3 Singapore 71
4 New Zealand 64
5 Australia 60
6 Hong Kong 59


*Percentage of respondents who expect their business to grow in the coming year

The CPA Australia Asia-Pacific Small Business Survey 2012 is a survey conducted with owners or senior representatives (including those in senior financial roles) of businesses with less than 20 employees. The markets included in the survey were Australia, Hong Kong, Malaysia, Singapore, New Zealand and Indonesia. The survey was conducted during the period from 2 October to 15 October 2012. In total, 1764 respondents participated in the survey, including 500 participants in Australia, 249 participants in Singapore, 250 participants in Malaysia, 250 participants in Hong Kong, 258 participants in New Zealand and 257 participants in Indonesia.

The five-step fact sheet to help businesses address some of the issues highlighted in the survey results:

  1. Reduce your reliance on external debt
  2. Improve your productivity
  3. Review your cost structures for savings
  4. Adopt appropriate risk management strategies
  5. Review your business plan for the changed environment

CPA Australia has also developed a list of priorities through which governments can work with small businesses to drive growth and prosperity:

  • governments must exercise responsible economic management – a good overall economic environment directly impacts small business confidence
  • governments should regularly monitor small business access to finance – regulators must continue to monitor small business lending practices to avoid overly risky or overly cautious lending practices
  • governments must make it as easy as possible for people to establish and run small businesses – there is a strong positive connection between new small businesses and business confidence, hence making it cheaper and easier to establish and run small businesses has a positive affect on the economy
  • governments should work with education institutions, industry associations and accountants to improve the business skills of small business – providing small business with access to information and training in business skills can do much to improve the productivity and success of small business