The financial services and insurance industries expect “solid” improvements this year, with confidence rating just above the national average, according to the latest Sensis Business Index.

The report for the December quarter – based on interviews with 1000 SMEs – shows insurer confidence lifted two points to +40.

The rise is attributed to “the specific strengths of their businesses, growing sales and being well established”.

The index shows confidence in the Federal Government has risen six points, in the first survey since Malcolm Turnbull took over as Prime Minister.

The industry’s outlook on sales was soft (+5), as were profitability (0) and prices (+1). The wages outlook grew (+14) and the employment outlook fell (-3).

For the current quarter sales expectations are stronger (+9) and profitability weaker (-6). Employment (+5) and prices (+3) are positive. For the year ahead there is a better outlook for sales (+22), profitability (+26), wages (+19) and prices (+24). However, employment (+1) and capital expenditure (0) are flat.

Almost half the businesses surveyed say finding skilled and committed staff is among their biggest problems.

Sensis CEO John Allan says employment is a key area to watch this year, with 52% of businesses now reporting barriers to taking on new staff.