After a continued period of declining revenue and profit, the August results of the Fifth Quadrant SME Sentiment Tracker suggest confidence is growing as inflation rates have declined and interest rates have stabilised.
The SME Sentiment Tracker, conducted by business market research firm Fifth Quadrant in partnership with Ovation, saw the Index rose from 87 to 105 And despite the continued drop in year-on-year revenues, 47 per cent of SMEs reported a profit and 33 per cent are expecting their revenues will increase over the next four weeks compared to 22 per cent in the previous month.
Decision makers also report fewer concerns regarding increasing costs and are more confident about local and global economic conditions There is also a marked increase in recruitment activity, with 24 per cent currently looking to fill roles compared to only 19 per cent in July.
The Index also noted a more bullish outlook for SMEs in the lead-up to the Christmas trading period. As a result, 37 per cent of all SMEs are now focusing on growth over the next 12 months, the highest level reported for this metric since October 2022.
There was a marked capital expenditure increase as well, with 30 per cent of SMEs increasing investment over the next three months. It is also noted that only nine per cent of SMEs expect to have difficulties meeting loan repayments over the next six months, down from 16 per cent in July.
“Despite ongoing challenges, the August findings indicate a brighter outlook for SMEs,” Fifth Quadrant’s Managing Director, James Organ, said. “Confidence is on the rise, and businesses are more optimistic now than they were earlier in the year. Growth initiatives are back on the agenda with recruitment and capital investment bouncing back as we approach the final quarter of another very challenging year. Only time will tell but, hopefully, this is a turning point for SMEs.”
