Measuring local business success: A first-time longitudinal tracking tool for government

Friday, November 06, 2015

Australia has always been an entrepreneurial nation, with business the backbone of the economy and the labour force. Now, a new tracking index created by McCrindle enables Australia’s 565 local councils to measure the business conditions, performance, and sentiment of our nation’s 2.1 million actively trading businesses, 99.5% of which are small-medium enterprises.

Businesses facing external stress but internal success

The first Business Performance Sentiment Index (PSI) results, featuring 179 business owners from the Hills Shire Council, indicate that businesses face stress in terms of the external factors – the general economic conditions and local infrastructure, with strong concerns about the regulatory burden placed on them:

  • 48% of businesses say Australia’s economy is performing worse than 6 months ago
  • 40% indicate that the time and cost spent on compliance, legislation and regulations has increased in the last 6 months
  • Performance is strong but rising business costs are rising, especially felt by small business

    Internally, performance has yielded good revenue and profitability growth over the last 6 months, and 47% of business owners say their sales revenue is better than 6 months ago. This is coupled, however, with rising costs of doing business:

  • 38% say business costs are worse now than 6 months ago, and
  • 76% of small business owners (5-19 staff) report an increase in staffing costs in the last 6 months
  • Business owners are optimistic about performance but uncertain about Australia’s economic outlook

    While 42% of business owners expect Australia’s economy to be performing worse in 6 months’ time, 52% expect their own revenue to be better, with expectations for profitability growth and increased employment. 3 in 5 (58%) also expect costs to increase.

    Mark McCrindle, Principal of McCrindle says, “The Business PSI is designed to be deployed longitudinally in local and regional geographies, as it measures economic conditions, regulatory settings, and infrastructure in a local context. Business performance can be measured by region over time to get real-time analysis of local economic conditions, and to see the impact of local policies, investment, and infrastructure development, as well as to measure the impact of state and national issues and economic conditions.”

    Chairman of the Sydney Hills Business Chamber, Anthony Moss, in partnership with the Hills Shire Council, commissioned the Business PSI to measure the pulse of the Hills Shire. “These first results provide a strong indicative benchmark, and we expect that every 6 months the results of the Hills Shire Business PSI will be much anticipated in the region.” The next edition of the Hills Shire Business PSI will be conducted in March 2016.

    Hills Shire Council Mayor Dr Michelle Burns endorses the PSI tool. “The success of small businesses is crucial to our local economy and anything that can help us to better understand the challenges that small businesses face on a daily basis is welcomed. Business PSI is a great tool, and it will help us as we partner with small businesses to help build a more vibrant and prosperous Sydney Hills.”

    The results of the PSI were presented on 5 November 2015 at the Hills Shire Council and are available for download via the Sydney Hills Business Chamber website.

    The Hills Business PSI in the Media


    The Business PSI can be conducted by any organisation, local government, or business chamber through partnership with McCrindle. The instrument is designed to be deployed every 6 months through a survey to business owners and managers for longitudinal tracking.

    As the developers and deployment partners of the Business PSI, McCrindle can not only efficiently deploy, analyse, and visualise this survey for organisations, but act as a clearinghouse of the longitudinal data and so can provide benchmarking of industry or local results against other areas or sectors, as well as provide longitudinal comparison.

    For information on conducting your own PSI, contact McCrindle at or call 02 8824 3422.

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