Updates to this research will be published fortnightly to track the impact and response to COVID-19. View Previous Wave.
With Melbourne entering Stage 4 restrictions and border closures reintroduced, it is no surprise that more than 70% of SMEs report declining revenue due to COVID-19. The latest wave of the COVID-19 SME Research Tracker shows that short term expectations remain very weak with 42% of SMEs in Victoria anticipating declining revenue over the next 4 weeks.
Table 1: Future Revenue Expectations by State
The inability to contain the virus both globally and locally is also increasing the long-term impact on business investment and employment. Some very concerning data points include:
- Nearly 50% of SMEs in NSW have laid off at least 1 employee.
- Only 14% of SMEs currently accessing JobKeeper will be ineligible to continue in October.
- One quarter of SMEs have deferred loans, with the majority unable to restart repayments at the conclusion of their six-month deferral agreement.
- Only one third of SMEs now expect revenues to return to pre-COVID levels by the end of 2020.
Table 2: Change in Number of Staff
Accordingly, the proportion of SMEs concerned about business survival has ticked up to a new high of 73%. Consequently, most SMEs support a COVID-19 insolvency regulation to protect businesses from bankruptcy until conditions and revenues recover.
While many organisations report positive working from home outcomes, a significant 30% of SMEs are concerned about lower productivity when their staff are working remotely. If not addressed this lack of productivity could easily lead to further job losses.
Table 3: Productivity of Team Members Working From Home
The second wave of COVID-19 in Victoria is pushing many SMEs to the limit. With confidence at all-time lows and job losses increasing, the short term prospects look bleak. Accordingly, the majority of SMEs will require ongoing support and therefore the extended JobKeeper program will continue to drain Government funds until at least March 2021.
It is also worrying that 30% of SMEs are now reporting less productivity from staff working from home. Consequently, business leaders need to provide appropriate guidelines, training, technology and support to ensure individuals have all the tools to contribute to company survival during these difficult times.
Please click on this link to access the full report including subgroup analysis by industry sector, size of business and State. ACA Research and TEG Insights will publish updates of this research to track the impact and response to COVID-19. Hopefully the results will become more positive as we work through this crisis together.