Small business wary on economic prospects

A majority of small companies aren't expecting any growth in their business in the next year.

Most small businesses believe the economy has deteriorated and aren't expecting things to improve in the next year.

A survey of more than 2,300 small and medium sized companies shows 67 per cent believe the economy is weaker than it was a year ago, while 54 per cent say they see no growth in their business next year.

The Australian economy grew by 3.1 per cent in the year to June 30, according to official figures, which was better than the 2.6 per cent growth recorded during the previous year.

The survey also found many businesses were looking to exports to lift their revenues.

Nearly one third of firms involved in international trade increased revenue from exports during the year, the survey by Western Union Business Solutions found.

However, a separate survey by banking giant HSBC found Australian exporters face a difficult few months due to uncertainty in the global economy and weak commodity prices.

HSBC's Trade Confidence Index showed 54 per cent of Australian exporters expect volumes to decline over the coming months.

"Exporters' subdued sentiment is symptomatic of the current global geopolitical situation," HSBC Australia's head of trade and receivables finance Andrew Skinner said.

"Falls in commodity prices, from coal and iron ore, to wheat, canola and wool, are also negatively weighing on exporter sentiment as prices have not been offset by the depreciation in the exchange rate as much as expected in order to boost confidence."

But the index also showed exports are likely to grow over the next 15 years, with iron ore, LNG and agricultural exports to be among the best performers.