Credit: Vector Illustration Business Concept Designed As A Businessman Is Kneeling Under Declining Red Line Graph. He Is Despairing To Decreased Profit; Full Of Disappointment Depression And Discouragement.
As COVID-19 continues to affect Australia and the rest of the globe, new data shows that SMEs are faring worse in the second wave than when the pandemic first struck.
The latest COVID-19 SME Tracker report, compiled fortnightly by business market research firm ACA Research in partnership with TEG Insights, reveals that 78 per cent of SMEs now reporting a decline in their revenue, the highest level reported since the inception of the research in early April. Consequently, there is an increased number (72 per cent) of SMEs that have expressed concern about business survival, an increase from 62 per cent in the previous report.
The report also noted that the reinstatement of restrictions has worsened expectations in the short term, with a significant rise in job losses. The percentage of SMEs reporting they have had to reduce their staff numbers has risen to 41 per cent compared to 34 per cent only two weeks earlier.
With the rapid increase in cases in Victoria, and the threat of these cases spreading to other states, there is also an increasing concern regarding personal wellbeing (up to 69 per cent from 50 per cent in the previous report), and 44 per cent also believe the Government needs to slow down their approach to winding back restrictions, twice the 22 per cent figure recorded at the beginning of July.
“The resurgence of COVID-19 is having a devastating impact on SME confidence with much of the tracking data at all-time lows,” ACA Research Managing Director, James Organ, said. “Despite the extension of the JobKeeper program it is hard to foresee any return in confidence until the curve in Victoria is flattened and any hotspots in NSW and other parts of Australia are controlled.
“With concern about business survival rapidly rising, it is unlikely the majority of SMEs will be in a position to survive without JobKeeper when the program is reset in October,” Organ added. “Accordingly, the Government must brace for a substantial investment to ensure the employees remain connected to their employers despite the stricter eligibility criteria outlined last week.”