The latest COVID-19 SME Tracker report shows a continued decline in revenue and employment among SMEs but there were some positives noted from the report as well.
The report, conducted by business market research firm ACA Research in partnership with Ovation that has tracked the impact of COVID-19 across more than 400 small and medium enterprises each month, noted that 57 per cent reported lower revenues due to the recent lockdowns and restrictions. The average SME reported a decline of 22 per cent, compared to 17 per cent in August.
The lockdowns have also affected SME employment activities with 33 per cent reporting lower staff levels due to COVID-19 while the proportion of SME’s now recruiting sits at 21 per cent compared to 32 per cent in July. In addition, there is a noted lack of candidates applying, which the report interprets as being that government support may be a disincentive to apply for paid work.
Despite the negative data, however, SMEs are more positive about short-term revenues and expectations regarding local and global economic conditions over the next three months with lockdowns coming to an end.
Nevertheless, the report noted that business investment outlook remains weak as SMEs need more certainty regarding ongoing economic conditions once lockdowns have been lifted. It also does not help that capital expenditure intentions over the next three months have dropped sharply.
Meanwhile, dissatisfaction with the Federal Government remains high at 43 per cent though it slightly decreased from 45 per cent reported in August. SMEs remain positive in relation to the vaccination roll out, however, with 92 per cent intending to get vaccinated, including 66 per cent that had already received at least one jab by mid-September.
“In summary, revenue and employment data remains weak amongst SMEs, but sentiment regarding economic recovery is turning as we move closer to the end of lockdowns,” ACA Research, Managing Director, James Organ, said. “Hopefully, SMEs will be the first to benefit when restrictions are lifted and consumer spending increases across all categories, especially as we run into the critical Christmas shopping period.”