18 Feb 2013

Small business in dismal state

2:03 pm on 18 February 2013

The Australian Chamber of Commerce & Industry says small business is in a dismal state.

The latest ACCI small business survey for the December quarter showed the sector was still in deep contraction.

Chief economist Greg Evans said specific indicators for sales activity, profitability, investment and employment were "all fairly dismal".

"The sector was under significant pressure over that period and it is certainly continuing to endure very difficult trading conditions," he said on Monday.

AAP reports the small business conditions index eased to 40.5 points in the December quarter from 40.7 in the previous three months, remaining well below the 50-mark that separates contraction from expansion.

Mr Evans said firms were having to absorb the impact of higher energy costs and the carbon tax, rather than passing that on to their customers, leaving balance sheets under pressure.