Business owners, especially small business operators, are less likely to create new jobs this year based on research from MYOB.

The MYOB Business Monitor shows only 14 per cent of SMEs overall intend to take on new staff in the 12 months to February 2014. This compares to 19 per cent who intended to in the 12 months to February 2012. Further, the proportion intending to increase staff pay fell from 24 per cent to 21 per cent.

MYOB CEO Tim Reed said current political and economic uncertainty are the likely contributors of this trend.

“In times of uncertainty, it’s natural for business owners – especially those with no or few employees – to bunker down rather than lift their investment in people,” he said.

“The state of the Australian economy directly impacts their confidence in the future of their business. When their confidence drops, they take less risk in investing in new staff members.

“That’s also the case with the country’s political health. Business owners wait hopefully for legislation and other fiscal and monetary policy moves that have a significant positive effect on their livelihood.

“This has obvious ramifications for the broader public. With more than two million small businesses, their ability to create further employment has strong implications for the job market.”

The biggest drop in intention to employ over this two-year period occurred amongst small business operators (with 5 to 19 employees), suggesting a hold-off on growth plans. This was followed by solo operators (with 0 employees) – 32 per cent to 27 per cent and 17 per cent to 9 per cent respectively.

Conversely, the proportion of SMEs overall intending to maintain existing staff levels rose from 61 per cent to 70 per cent. The proportion maintaining staff pay levels also rose, from 57 per cent to 63 per cent.

Having said that, the MYOB research analysis shows the local SME job market overall has remained fairly stable in the last three years.

“This is promising for the more than 7.4 million Australians already employed by this sector, giving them confidence about their employment situation,” Reed said.

“Combined with record-low interest rates, this will hopefully translate into stable consumer spending.”