While the recovery among SMEs has been steady for most of 2021, the latest COVID-19 outbreaks and the lockdown measures implemented anew as a result have caused a significant drop in the level of confidence, with the outlook for the near future uncertain.
The latest SME Monthly COVID Tracker by ACA Research in conjunction with TEG Insights reveals that the proportion of SMEs reporting lower revenues than before the pandemic has increased to 56 per cent with the average revenue decline rising to 17 per cent. In addition, 57 per cent of SME decision-makers have aired their concerns regarding business survival, with 24 per cent saying they are very concerned.
Confidence in local and global economic conditions over the next three months has also declined with one-third of the decision-makers expecting weakness. The report pointed out that the latest round of Government support will be essential if SMEs are to survive the latest extended lockdowns.
Despite declining confidence, employment figures amongst SMEs have not yet been impacted, with 32 per cent of SMEs now hiring, up from 27 per cent in June. However, competition for staff continues to increase as 57 per cent of SMEs that are hiring say that recruitment is more difficult now than it was prior to the pandemic.
Satisfaction with the Federal Government’s handling of the pandemic has reached all-time lows with only 40 per cent of SMEs satisfied, compared to 57 per cent in March. Concurrently, SMEs support the ongoing vaccination drive with 88 per cent indicating they will get vaccinated, a jump from 79 per cent a month earlier. At the time the data was collected 40 per cent of SMEs’ staff had received at least one jab and 16 per cent of SMEs’ teams were fully vaccinated.
“Sentiment amongst SMEs continues to weaken and is expected to worsen as lockdowns are extended in Sydney,” James Organ, Managing Director at ACA Research, said. “Despite further support from the Federal Government, confidence is clearly waning as frustration builds regarding the vaccination program. While employment data remains positive, it is likely to quickly decline if restrictions remain in place for the longer term.”