New research from Westpac has revealed that 85 per cent of small-business leaders are feeling confident about the future as they believe the economy will quickly return to growth as restrictions ease.
The survey of 1000 small- to medium-business leaders across Australia also noted that seven in 10 are expecting an increase in sales over the next 12 months.
“Small businesses have been through an incredibly tough time and while challenges remain, it’s extremely encouraging to see so many business leaders feeling optimistic about the future as Australia prepares to reopen and recover,” Chris de Bruin, Westpac Chief Executive Consumer & Business Banking, said.
“To help accelerate the recovery our research showed small-business owners want Australians to shop local. More than a third of business owners called this out as one of the best ways to help them recover from the impacts of COVID-19,” de Bruin added. “We also know there has been an increase in consumers buying Australian made goods and services and we hope this trend continues to help aid the recovery.”
The survey also revealed some of the main challenges small businesses are facing in their post-COVID recovery efforts. Lockdown restrictions remain the top concern facing small-business leaders at 48 per cent, followed by fewer customers and a reduction in sales (31 per cent) and supply-chain disruption (28 per cent). Four in five, 80 per cent, of small-business leaders also reported experiencing an increase in the cost of doing business over the last twelve months, particularly in the cost of goods (36 per cent), technology (33 per cent) and operating expenses (30 per cent).
In addition, 42 per cent of small-business owners are facing staffing challenges that impacted their businesses growth. In fact, 43 per cent said they have been forced to take on additional work to cover the shortfall and 40 per cent are planning to give their staff a pay raise within the next 12 months to boost employee retention.
“Despite the challenges, small businesses have faced our research showed most businesses were better prepared for lockdowns this year compared to last,” de Bruin said. “Many small businesses have been able to save money during the pandemic which they will use for business development and investment as the economy improves.”
Westpac Business Bank Chief Economist, Besa Deda said that small business plays a significant role in the Australian economy, accounting for 33 per cent of Australia’s GDP and employing almost half of Australia’s workforce.
“The economic bounce-back that will follow reopening will be led by small business, who are the backbone of the Australian economy,” Deda said. “Business confidence has improved in recent weeks, reflecting the pace of vaccination and reopening roadmaps, although some uncertainty and challenges persist.
“As the economic recovery ramps up, we expect business confidence to improve further and this will be followed by a resumption in small business spending, including on technology and digital offerings,” Deda added. “Reopening also comes at a critical time for small businesses preparing for the busy Christmas holiday season.
“Low-interest rates, elevated household savings, a strong housing market, and pent-up consumer demand are a potent mix of factors that will help reignite growth in the economy,” Deda concluded.