SMEs still facing revenue decline despite signs of recovery

business confidence declining

A new report reveals that 57 per cent of SMEs are still reporting lower revenues than they were recorded before the COVID-19 pandemic, with the average SME turnover down by 22 per cent. In addition, most SMEs also reported a weak holiday trading period compared to 2019 in the wake of the current pandemic.

The COVID-19 SME Tracker report by market research firm ACA Research, in partnership with TEG Insights, also noted that JobKeeper payments in January may have been a factor as 33 per cent of SMEs report a decline in employee numbers, compared to 26 per cent in December. One-fifth of SMEs continue to receive JobKeeper payments but 71 per cent of decision-makers are unable to guarantee job security for their staff with the measure set to end this month.

Also noted in the research is that while working from home remains a popular option for Australian SMEs, the proportion of employees working remotely has fallen to 25 per cent in February from 33 per cent in October 2020. And despite expectations remaining positive about the Australian economy’s recovery, SMEs predict a decline in global conditions over the next three months and are, therefore, cautious regarding capital investment and wage growth.

“Market conditions continue to be challenging for SMEs,” ACA Research Managing Director, James Organ, said. “Despite some green shoots as restrictions and border closures are lifted, revenue and jobs data remain relatively weak.

“Notwithstanding a level of confidence regarding the Australian economy, SMEs are uncertain about their short-term prospects with the impending conclusion of JobKeeper and concerns about global economic conditions,” Organ added. “Accordingly, capital investment and wage growth are predicted to be flat over the next three months as SMEs look for more clarity in relation to the vaccination program, economic conditions, and ongoing Government support.”