New research from RFI Global, commissioned by online small-business lender, Prospa, reveals that 46 per cent of Australia’s SMEs anticipate a decrease in turnover by the end of the year due to economic pressures and 54 per cent have said they are likely to need to invest further into their business to generate future cashflow.
Economic and supply chain conditions remain the biggest concern for businesses, with 59 per cent experiencing supply chain cost increases due to current economic conditions. Labour pressures are also a major concern for businesses, with 53 per cent trying to address rising labour costs and 42 per cent struggling to find replacements if any current staff were to leave the business.
While there is an overall downward trend in sentiment among SMEs brought about by these concerns, short-term business confidence continues to improve, reaching a 12-month high in December 2023 with 37 per cent expressing high confidence in their five-year outlook.
“These findings demonstrate that while businesses continue to do it tough, Australia’s SME community is yet again proving its resilience by maintaining high confidence in their short-term outlook,” Prospa Chief Revenue Officer, Beau Bertoli, said. “High fuel and material costs combined with growing public frugality have disproportionately impacted the hospitality, retail and wholesale and warehousing industries. However, as inflation begins to ease and with rate cuts on the horizon for later this year, with the right funding and support, the outlook for the Australian business community remains positive.
“With small businesses becoming increasingly time- and resource-poor, it has never been more crucial to adopt simplified backend processes and automate cumbersome admin tasks,” Bertoli added. “SMEs can gain greater peace of mind and save valuable time as transactions sync automatically, allowing business owners to manage their finances from anywhere.”
