7 March 2012 – The business and property sector had the strongest outlook for growth during 2011 despite last year being a tough one for the property services market, a GE Capital survey says.
Chief finance officer for GE Capital Australia and New Zealand Mark Toohey said: “The survey of more than 5200 mid-market CFOs showed that, counter to the outlook of the larger property players, during 2011 mid-market business and property organisations were much more optimistic in their outlook for the future.
“While the Australian economy emerged from the global financial crisis stronger than most other advanced economies, the global and domestic uncertainty resulted in a lack of confidence within the sector,” he said. “This impacted the number of new developments coming out of the ground and flattened consumer sales in the residential market.
“Yet the start to 2012 has shown a glimmer of hope for the property industry with demand for commercial space increasing in all capital cities and office vacancy rates at their lowest rates for three years and commercial office market sales activity at their highest.
“Sustainability is also firmly on the agenda with the introduction of the NABERS mandatory disclosure scheme which meant for the first time green star will be a requirement for all commercial space leased larger than 2000 square metres,” he said.
In 2010/2011, more than half (56 per cent) of mid-market business and property CFO’s expected to see a growth in revenue and 41 per cent expected to increase their staff numbers, he said.
“In comparison, the key concerns for these CFOs were capital resourcing (including managing cash flow, financing growth, accessing finance and changing interest rates) and managing talent, (including the recruitment and retention of staff and succession planning).
“This confidence demonstrates the sector’s plans for long term business growth. Retaining and attracting talent, even in tougher times, will be critical for its ability to sustain a positive outlook for 2012,” Mr Toohey said.
Tracking the business confidence and outlook of mid-market businesses – those with a turnover between $10 million to $250m – the survey found that Australia’s mid-market generates nearly two-fifths (37 per cent) of all business revenue – more than one trillion dollars in 2010/11 – and employs nearly one-quarter of the full-time workforce.
The business and property sector comprises 13 per cent of all mid-market businesses and generates 12 per cent of all mid-market revenue.