Business Performance Index Overview

The Sydney Hills Business Chamber has been partnering with McCrindle since 2015 to deliver the Business Performance Sentiment Index (Business PSI).

The Business PSI is an ongoing measure of business performance, conditions and sentiment in the Hills region. It provides a snapshot of how local businesses are tracking.

How it works

The Business PSI is based on a 21-question survey of business owners and managers.

It measures the three key indicators on a scale, from accelerating on the extreme positive to collapsing on the extreme negative.

Each of the questions in the survey involves a 7-point Likert scale.

The mean of each score-card is used to produce the individual metric score. There is a theoretical maximum score of 300 and a theoretical minimum score of 300. The above question from 2015, for example, after calculating its mean, has a score of 52.

The results of all 21 questions across the three measures indicate whether business conditions, performance and sentiment are in the positive zone (improving, rising, advancing, accelerating) or the negative zone (slowing, falling, deteriorating, collapsing).

The average of the three main measures gives an overall Business PSI score.

Why it’s useful

The Business PSI is robust because it is calculated based on the survey and measures current performance (actual earnings, expenses, staffing numbers) as well as sentiment – forecast costs and growth and expectations of the six months ahead.

This allows for a more nuanced understanding of business performance and conditions. It better positions local businesses to grow and innovate. Industry groups and peak bodies can leverage the information to measure specific business categories and compare findings on a city, state and national level.

The Business PSI also enables business performance to be compared over time to get real-time analysis of local economic conditions, and see the impact of local policies, investment, and infrastructure development.

Keen to find out more? Download the latest report.

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