Updates to this research will be published fortnightly to track the impact and response to COVID-19. Week 14 results are now available.
The latest wave of the COVID-19 SME Research Tracker published by ACA Research and TEG Insights reports the proportion of SMEs expecting revenues to return to pre-COVID levels by October has declined from 53% to 49%. Accordingly, three quarters of SMEs believe the current stimulus measures need to be extended until 2021 and encourage bankruptcy protection until business conditions and revenues recover.
Table 1: Government Stimulus and Support Measures
Short term expectations are also sluggish, with just over one third (37%) expecting increasing revenues over the next 4 weeks, compared to 39% two weeks earlier. Confidence amongst the hospitality and construction sectors has declined considerably, but there is stronger sentiment amongst retailers.
Table 2: Future Revenue Expectations
With most SME decision makers believing the pandemic will have a medium to long-term impact on the global and Australian economies, it is not surprising that nearly half expect their workforce to be negatively impacted for at least 6 months. Business spending and investment plans are also on hold, with 65% suggesting lower expenditure until 2021.
Table 3: Negative Impact of COVID-19
Satisfaction with the Government has also declined with the uptick in new cases in Victoria undermining the ongoing recovery. There has also been a significant increase in dissatisfaction in QLD as the State Government remains very cautious regarding border restrictions.
The lower levels of confidence reported this week, has translated into much higher levels of concern regarding business survival with a jump from 57% to 69%.
Table 4: Level of Concern about Business Survival
The data reported this week is very disappointing. As most decision makers expect a medium to long-term impact of COVID-19, the outlook is not promising especially with the new outbreak in Victoria. With cashflow and employee retention becoming more challenging for many SMEs, it would appear further job losses and bankruptcies are highly likely and hence the extension of stimulus and support measures and the introduction of bankruptcy protection seem inevitable.
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.