Forty two per cent of respondents to the survey said they believe a recession will be avoided in FY2009-10, while 8 per cent believe there will be a significant upswing in the economy. However, 32 per cent still believe that a recession will continue into the financial year.

There appears to be significant variation in how well SMEs have weathered the economic downturn so far. When asked to compare annual turnover for FY2008-09 with the year before, 39 per cent of respondents said it had increased, 31 per cent reported no change, while 30 per cent said turnover had fallen.

On the topic of staff retention, 16 per cent of respondents said they had increased their full-time equivalent staff numbers. Meanwhile, 61 per cent said there had been no change in staff numbers and 23 per cent had reduced their teams. In addition, 13 per of those surveyed said they had actually found it more difficult to recruit talent, while 30 per cent said it had become easier.

MSI spokesperson Charles Hornor said he believes the survey highlights how quickly attitudes can change. "Only a few months ago it was all doom and gloom and yet now, 42 per cent of SMEs believe a recession will be avoided," he said. "What ... seems to be taking shape in the mid of SME owners and managers is the fact that we're not going to hit rock-bottom in the way that they have in North America and Europe."

A total of 976 Australian SMEs (up to 200 employees) took part in the survey, which was designed to ascertain current views of SME owners and managers on how their businesses have performed over the last year.

>> For the latest news, views and analysis of issues affecting in-house lawyers, check out Lawyers Weekly's dedicated in-house site www.lawyersinhouse.com.au