Credit: Words Fiscal stimulus with the financial data on the background.
An overwhelming majority of SMEs are looking for the current stimulus and support measures to be extended up to 2021, in the hope that business conditions and revenues will recover by then.
According to the COVID-19 SME Tracker, a report released by ACA Research and TEG Insights, 75 per cent of SMEs are now more pessimistic than they were a fortnight ago that the economy is picking up, and believe they will need ongoing stimulus measures and bankruptcy protection.
The survey revealed that the number of SMEs hoping that their revenues return to pre-COVID levels by October has declined from 53 per cent to 49 per cent. There is also a rising concern about business survival, with 69 per cent having such concerns, up from a previous figure of 57 per cent.
Short term revenue expectations are also at a low, with only 37 per cent expecting increased revenues over the next four weeks, compared to 39 per cent two weeks earlier. Confidence amongst the hospitality and construction sectors has declined while retailers are more optimistic.
With most SME decision-makers believing the pandemic will have a medium to long-term impact on the global and Australian economies, it is not surprising that nearly half expect their workforce to be negatively impacted for at least six months. Business spending and investment plans are also on hold, with 65 per cent suggesting lower expenditure until 2021.
Satisfaction with the Government has declined as new COVID-19 cases are reported in Victoria. There has also been an increase in dissatisfaction in Queensland as the State Government has remained very cautious regarding border restrictions.
“The data reported this week is very disappointing. As most decision makers expect a medium to long-term impact of COVID-19, the outlook is not promising especially with the new outbreak in Victoria,” ACA Research’s Managing Director, James Organ, said.
“With cashflow and employee retention becoming more challenging for many SMEs, it would appear further job losses and bankruptcies are highly likely and hence the extension of stimulus and support measures and the introduction of bankruptcy protection seem inevitable.”