SME decision-makers reported stronger revenue, profit and employment indicators in December, but are predicting difficult business conditions over the next three months, both locally and globally, as COVID-19 case numbers grow exponentially due to the Omicron variant.
According to the latest COVID-19 SME Tracker, conducted by business market research firm ACA Research, 18 per cent of SMEs reported revenue growth, this is noted to be the largest reported growth since the research commenced in April 2020. In addition, 25 per cent of SMEs were recruiting in December compared to 20 per cent in the same period last year. Despite this, recruitment continues to be difficult for 85 per cent of respondents, with the lack of candidates applying for positions the major challenge followed by a lack of skilled or qualified candidates. Resourcing and supply chain issues brought on by Omicron are likely to exacerbate and confidence is expected continue to be diluted until we have more certainty regarding living with the pandemic without Government support.
Despite the challenges, SMEs are expecting a more positive 2022, with 50 per cent targeting growth. To support these growth initiatives, investment intentions are also trending up with increases across all key categories including capital investment (23 per cent), employee numbers (21 per cent) and marketing spend (23 per cent). In an environment where employees will be hard to attract and retain, 27 per cent of SMEs expect wages to increase over the next three months, compared to just 10 per cent back in August 2020.
After a bounce in November, satisfaction with the Federal government is again in decline as SME decision-makers question the effectiveness of the pandemic management. The report reveals that 36 per cent of SMEs are now dissatisfied compared to 30 per cent in November.
“In summary, many SMEs finished 2021 on a more positive note with most key indicators trending up,” ACA Research Managing Director, James Organ, said. “However, business confidence is extremely tenuous with a high level of uncertainty regarding 2022 due to the accelerating spread of COVID and the associated impact on demand, staff and the supply chain.”
The COVID-19 SME Tracker is conducted in partnership with Ovation and tracks the impact of COVID-19 across more than 400 small and medium enterprises each month.
