Despite the uncertainty and pessimism about the current economic conditions, for many of Australia’s SMEs, this particular period has been a positive one in terms of their revenue, profit and growth.
The latest SME Sentiment Tracker report by business market research firm ACA Research shows 47 per cent of SME decision-makers reported lower revenues than before the pandemic, however, this is the lowest percentage of SMEs seeing a decline in revenue since May 2021. Profit also continues to climb with 49 per cent of SMEs reporting a profit in May, compared to only 39 per cent in February.
On a more cautious note, 48 per cent of SMEs are still expecting economic conditions to soften over the next three months, both globally and at home. In addition, the impact of supply chain issues continues to hinder business prospects with 55 per cent of SMEs impacted by delays and availability, rising up to 78 per cent in the construction industry.
The report also noted that SMEs intending to invest in people, marketing and equipment are expected to remain steady over the next three months while the demand for financing has increased slightly, with 13 per cent of SMEs needing additional finance compared to 11 per cent in April.
Job vacancies continue to rise with a recoded 29 per cent this month from 23 per cent in January. This is further complicated by the sentiment of 72 per cent of the SMEs with vacant positions that recruiting is now more difficult than before the pandemic. There is also an increasing demand from SMEs (54 per cent) for the Government to increase skilled migration quotas, particularly in the hospitality sector (79 per cent).
On the other hand, staff mobility has increased with 56 per cent of SMEs that fly domestically for business resuming travel and 25 per cent flying internationally.
“SME sentiment in May remained solid. Decision makers are realistic about the difficult economic conditions but continue to invest in growth despite ongoing challenges with supply chains and people,” ACA Research, Managing Director, James Organ said. “With another jump in interest rates just announced sentiment could decline, but the uplift in mobility should be positive for many businesses including retail and hospitality.”
