The latest edition of the SME Sentiment Tracker reveals improvements in the year-on-year (YoY) revenue figures for SMEs, with that revenue rebounding from an annual low in August.
The report highlights the fact that that 53 per cent of SMEs reported a profit during the previous month, an encouraging improvement from a low of 40 per cent in July. At the same time, SME concerns surrounding higher interest rates have declined from 87 per cent in Q4 FY23 to 79 per cent in Q1 FY24.
Demand for additional finance has increased to 16 per cent, the highest level of demand for finance since July 2022. At the same time, loan stress has subsided in line with this increased demand for finance. Only six per cent of SMEs foresee difficulty in meeting their loan repayments, which is the lowest amount this year.
Sentiment surrounding the Australian economy has improved as well with net sentiment reaching its highest point since May 2022. In turn, 69 per cent believe their business is well insulated against the threat of recession in Australia over the next 12 months.
Meanwhile, business confidence index has remained high at 99 while recruitment activity has seemingly caught up as of late as 23 per cent are looking to fill job vacancies. Recruitment challenges still remain, however, with 55 per cent of those hiring found it more difficult to find suitable candidates in Q1 FY24 than 12 months earlier.
“Although concerns may linger, this month’s data displays a positive picture for SMEs,” Fifth Quadrant Managing Director, James Organ, commented on the findings. “The August results found a bullish confidence among SMEs despite challenges, and the September results have vindicated this with increased profitability and greater confidence in the Australian economy. Concerns remain about fuel and energy costs – and worries about interest rates are far from over – however, the data suggests a general sense of optimism amongst SMEs as we emerge from the winter months.”
The SME Sentiment Tracker is conducted by business market research firm Fifth Quadrant in partnership with Ovation and tracks business sentiment across more than 400 small and medium enterprises each month.
