Of the hundreds of businesses surveyed for this quarter’s TEC Confidence Index 58% expect improvement in their profitability, continuing an upward trend, evident in results from the previous two quarters.

“Those surveyed with a turnover less than $1.5m, and those from NSW are the most optimistic with 78% and 75%, respectively, expecting to see an increase,” Nikki Potter, CEO of The Executive Connection said.

“Interestingly the least optimistic are the larger businesses – those with a turnover greater than $100m – 14% of those businesses surveyed expect to see a decrease in their profitability, compared to 5% overall.

“An optimism about increased profitability flows through to all areas of business, from confidence to expectations of growth. This in turn plays out in relation to plans to increase staff numbers,” she said.

Overall, 46% of respondents expect their organisation’s total number of employees to increase during the next 12 months, and 45% expect staff numbers to stay about the same. Last quarter, 43% of respondents expected an increase.

The most optimistic were businesses with a turnover < $1.5m and both NSW and WA, with 66% and 50%, respectively, expecting to see an increase in staff numbers. Those with a $100m+ turnover were most likely to expect a decrease with 19%, compared to 9% overall.

“These figures are significant for what they reveal about the overall economic outlook of Australian SMEs and how this will impact the broad Australian economy,” Ms. Potter said.

The TEC Confidence Index – 2014 includes 378 responses from CEOs and business owners around the country and was conducted in February 2014. It is a quarterly survey measuring the confidence of Australia's top business leaders.

Through its affiliation with Vistage International Inc., TEC members have access to over 17,000 business leaders and owners in 15 countries across the world.

The TEC Confidence Index and various graphs for reproduction can be accessed here: http://www.tec.com.au/resources/tec-confidence-index/