With the Omicron variant peaking in January, revenue, profit, and employment data have declined along with sentiment regarding global and local economic conditions.
The latest ACA research data reveals that 54 per cent of SMEs reported a revenue decline due to COVID-19, up from 50 per cent in December. SME decision-makers that were surveyed in the research also expect difficult business conditions over the next three months, with more than 40 per cent expecting economic conditions to weaken locally and globally. At the moment, only 23 per cent of SMEs were recruiting in January compared to December (26 per cent).
On a positive note, 19 per cent of SMEs have experienced an increased revenue during the pandemic and the average drop is 15 per cent, trending down from 22 per cent in October. In addition, 39 per cent of SMEs are expecting growth in the next 12 months. Capital investment and demand for finance remained positive particularly in the IT/Office equipment category and rising demand for plant, equipment, and small trucks.
Meanwhile, support for the Federal Government continues to decline with 43 per cent of SMEs now dissatisfied, compared to 30 per cent in November.
“In summary, the expected dip in sentiment was realised in January,” ACA Research Managing Director, James Organ, said. “However, now that Omicron cases appear to have peaked, we do expect a rebound in confidence as SME revenues once again recover following a challenging holiday period.”
The COVID-19 SME Tracker is conducted in partnership with Ovation and tracks the impact of COVID-19 across more than 400 small and medium enterprises each month.
