Small and medium businesses in Victoria have the lowest level of confidence in the nation, a report shows.
The Sensis Business Index showed business confidence eased to 46 per cent in the three months to March, from 55 per cent in the three months to December.
The index was released the same week the Reserve Bank raised rates to 4 per cent, creating more costs for small businesses in Victoria to bear.
“We have seen a softening in business confidence nationally this quarter,” said Sensis Market Intelligence deputy group manager Christena Singh.
“However, business sentiment has been most severely dented in Tasmania and Victoria than anywhere else in the nation.”
Tasmania's business confidence slumped to 52 per cent from 66 per cent over the same period, 14 percentage points.
While in New South Wales confidence eased down 3 percentage points to 49 per cent in the quarter.
Victorian companies have found mixed trading conditions in the quarter, with sales edging down to 4 per cent from 7 per cent. Employment also fell from 6 per cent in the December quarter to negative-9 per cent in the March quarter.
Small businesses, which depend on the loans for daily financing, now face higher costs after major banks passed along the 25 basis point interest rate increase to small business borrowers.
The Sensis Business Index gauges activity at businesses with up to 199 employees nationwide, based on a sample size of 1800 in metropolitan and regional areas.
czappone@fairfax.com.au
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