Business Banking - Is the worst of the global financial crisis over?

Recession - The Aftermath

The past year has been a testing time for many businesses. The general picture that has been painted is a story of doom and gloom. Decreased consumer confidence, record insolvencies, lack of funding and the big economic 'R' word – recession – are some of the challenges businesses are facing. Things are by no means bright, and there have been plenty of casualties of all sizes and shapes so far. But for those left standing, how bad is the current state of affairs?

Is The Worst Over?

We are now hearing words like ‘recovery’ and ‘green-shoots’ in business circles and, just as quickly hearing the nay-sayers shoot down any positive reports. Small business owners could be forgiven for finding themselves a little confused as to the best plan of attack.

We are by no means out of the woods yet, but we have moved a long way from the “we’re all doomed” talk of 12 months ago. It is a time for keeping the belt tight, or tightening it if possible, whilst remaining ready and waiting for any opportunities that arise.

Now is as good a time as ever to be striking up new partnerships and negotiating better deals, as other businesses find themselves in new situations.

Light At The End Of The Tunnel

Coming on the tail of all the business carnage of the past year, some bright hopes for the future are beginning to appear. The ACCI-Westpac Survey of Industrial Trends (June Quarter) has shown strong indications of improved conditions. After two consecutive quarters 40% of respondents deeming finance as “harder to get”, the number has dropped to 11%.

General business sentiment had its strongest improvement since 1975, rising to the highest level seen since the end of 2007. Perhaps the survey’s best sign for the future are the improved expectations for the September quarter, and the increased plans for business investment.

In another positive sign, the Reserve Bank has also revised its domestic growth estimate for 2009 up to 0.5%, far superior to the 1.0% contraction originally forecast.

The Cameron Research Group's "SMEs through time:

The Cameron Panel" also show an improved mood amongst SME operators. The panel consists of ongoing interviews with SME operators, and in late 2008 the general consensus was "nervous…deeply concerned about the future". However the latest round of interviews (late May – early June) revealed a theme of "it's been tough but we're okay – we’ve tightened up business a lot – but if this is as bad as it's going to get, we'll be fine".

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