Businesses in the region are optimistic with strong expectations. Over the next 12 months, SME Businesses expect to exceed their revenue targets by 10.52% while Large Businesses forecast to exceed their revenue targets by 8.57%. This is highest levels reached over the past three years.
Businesses expected their revenue in 2017 to be ahead of budget by 11.75% for SME Businesses and 7.35% for Large Businesses. The actual result was lower than this (6.3% for SME Businesses and 5.71% for Large Businesses) but it is still a strong outcome.
Consistent with the strong revenue outlook, businesses in the region are also forecasting improved profit results. Over the next 12 months, SME Businesses expect to exceed their profit targets by 10.1% (9.4% in 2017) while Large Businesses forecast to exceed their profit targets by 7.9% (6.99% in 2017). A signal of a strong business environment is where revenue growth is profitable growth.
Business across the region reported actual profits for 2017 that were 5.74% ahead of budget, down from the 7.65% that was forecast but still a strong result.
Last year’s actual profit result compared to budget was lower than expected for SME businesses (forecast: 9.4%, actual: 4.7%) and Large Businesses (forecast: 6.99%, actual: 6.78%). Two observations are notable. Firstly, whilst behind expectations these results still show a strength in the Greater Western Sydney economy. Secondly, there is a clear trend over 2017 into 2018 of an improvement in the outlook and results of SME Business compared to Large Business, which are remaining consistently strong and positive, but not showing the same level of improvement).
Expectations regarding capital expenditure remains positive.
Large Businesses had expected to make capital expenditures in 2017 that were 5.06% ahead of budget. Ultimately their capital expenditure was more restrained, but still 2.14% above budget.
This same trend is reflected across the region, where actual capital expenditure for 2017 was 1.75% over the capital expenditure originally budgeted by businesses, but down on the forecast 4.9% expenditure over budget reported in the last survey.
Capital expenditure is expected to be 1.7% above budget in 2018, with a majority of business signalling an intention to continue to increase their capital expenditure.
2018 Report Highlights
Reaching its highest point over the survey’s history, businesses across Western Sydney are buoyant.
55% of businesses are expecting to increase their full-time workforce over the next 12 months.
The bold vision to make Western Sydney a 30-minute city will be a game-changer for liveability. Businesses are gearing up to leverage the opportunities from improved connectivity.
86% of businesses believe they have an effective website, 75% are using social media and have plans to invest more over the next 12 months.