Mining downturn impacts on small business

SMALL business is still struggling to pick up as the mining boom slows, despite a lift in sentiment for the future, a key survey of 1200 operators has found.

The Australian Chamber of Commerce and Industry's March survey found some improvement for small business, but revealed an outlook of "difficult trading conditions" in the months ahead.

Released on Monday, the survey did not take into account the effects of the Abbott government's budget cuts, but chamber acting chief economist Burchell Wilson played down its impact.

Despite budget cuts to payments to middle income families, Mr Wilson said the budget was only a "mild fiscal tightening", and he did not expect it to further slow the key sectors of retail and construction.

But he said despite some subdued optimism for the months ahead, that confidence was not translating into more investment or more jobs in the small business sector.

The results, he said, were contributing to further "reductions in employee numbers and slumping investment", despite promises from the government its budget would boost the prospects for the massive sector.

"Elevated wages growth and surging non-wage labour costs are squeezing profits and the small business sector is clearly struggling as a result," Mr Wilson said.

"For an increasing number of small businesses, growing their operations is simply not on the radar."



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