Australian SMEs are expressing optimism over trading conditions, with positive sentiment higher now than at any other point in the last 2.5 years.
The HSBC Trade Confidence Index showed 46 per cent of organisations expect trade volumes to improve over the next half-year, compared with 40 per cent six months ago.
Importing and exporting opportunities in Asia are the primary driver for the improved performance, with retail and construction showing the biggest gains.
Andrew Skinner, head of trade and receivables finance for HSBC Australia, said a range of factors are helping SMEs feel more optimistic, including loose monetary policy conditions and depreciation in the country’s currency.
“The improving UK and US economies have clearly had a positive impact on Australian exporters, as has the shifting of China’s focus towards more consumer-led economic growth,” he explained.
“And on the importing side, the rebalancing of Australian economic growth away from mining investment is clearly evident with both retail sales and housing construction being supported by low interest rates and increasing house prices.”
With trading conditions expected to improve, now may be the time to consider reviewing business insurance requirements, including professional indemnity insurance. As SMEs look to expand their operations overseas, it is always vital to ensure they have comprehensive cover to protect against a range of unforeseen circumstances.
According to Mr Skinner, one issue that is hampering small businesses is exchange rate volatility, which was listed by 52 per cent of respondents as their main barrier to success.
“Since the [US] Federal Reserve signalled a potential shift in monetary policy last year, financial market conditions and currencies have experienced some volatility,” he stated.
A 100-point move in a currency because of an unexpected event could be the difference in a shipment making or losing money for SMEs, Mr Skinner added.