Nearly half of survey respondents believe Australia has entered the downward leg of the economic cycle.

This is a sharp deterioration in sentiment from the two previous surveys. When added to those who believe we are already at the bottom of the cycle, sentiment is similar to that seen in 2008 when the international banking crisis was unfolding, although still less pessimistic than the depths of the downturn in 2009.


Figure 1: Where does Australia currently stand in the economic cycle?


Figure 1


Victorian and Tasmanian-based businesses are far more likely to feel we are in the downward leg of the economic cycle than their counterparts located elsewhere in the country. While 62 percent of Victorian survey respondents think we are on a downward cycle, only 30 percent of Western Australian agree.


This is a pattern repeated across the survey in which respondents in Western Australia and the Northern Territory are generally more optimistic about economic and business matters than those located elsewhere. The response obviously reflects the pace of natural resource developments in the West and the Territory and its flow on effects to the rest of the economy. It reinforces the notion of a two-speed or multi-speed national economy split between the resources’ haves and have nots.


Figure 2: Short, medium and long-term business prospects, as compared to the past 2 years of (%responses)

(6-12 months)

(next 3 years)

(5+ years)


2011 2012

Very good

4 0.7


17 10.4


54 42.3


20 37.3

Very poor 

4 8.7

Don't know

1 0.6
2011 2012
9.5 5
58.5 39.6
26.5 42.2
4 10.1
0.5 1.9
1 1.1
2011 2012
12.5 13.4
59.5 52.4
20.5 23.4
2 4
0.5 2.5
5 4.3

As we have noticed in previous surveys, business expectations tend to become more positive the further ahead they look. In our latest survey, 46 percent of private companies think their short-term prospects (6 months to 2 years ahead) are poor or very poor. For the medium term (3 to 4 years) this feeling shrinks to just 12 percent and to an almost invisible 6.5 percent for the long term (5 years and beyond).


Given the economic uncertainty, when respondents were asked what they will immediately focus on, the top three clear priorities were customer satisfaction, overhead management and finding alternative or additional revenue opportunities.

Video: Private Companies Survey 2012

Video: Private Companies Survey 2012
KPMG's National Managing Partner of Private Enterprise, Peter Siebels, gives an overview of the findings from the Private Companies Survey 2012.

Full report

Private Companies Survey 2012 in PDF

Download a copy of the Private Companies Survey 2012 in PDF.