COVID-19 News & Views

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Christmas Cheer for SMEs as Strong Revenue, Jobs and Investment Data Point to a Happy New Year

Updates to this research will be published fortnightly to track the impact and response to COVID-19. View Previous Wave.

The latest wave of the COVID-19 SME Research Tracker shows that sentiment amongst SMEs is very positive as a tumultuous 2020 draws to a close. Recovery continues to gain momentum with strong data reported across revenue, jobs and investment criteria.

46% of SMEs are now trading at pre COVID revenue levels or better and only 30% are reporting significant revenue losses compared to 39% in the last wave. Short term expectations are also very good with 41% of SMEs expecting better revenue in 4 weeks’ time.

Table 1: Decline in Revenue Due to COVID-19

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Jobs data has also rebounded with 26% of SMEs reporting job losses due to the pandemic, compared to 38% in November. Simultaneously, the proportion of SMEs recruiting new employees has again reached 20%. Recruitment momentum continues in the retail sector with the upward trend climbing from 8% to 18% since the end of September.

Table 2: Change in Staff Numbers (Before the Crisis vs Now)

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In line with the COVID vaccine rollout in the UK and the USA, all long-term impact indicators are firmer, driven by stronger sentiment regarding the Australian and Global economies.

Table 3: Impact of COVID-19

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Accordingly purchase intentions for the first quarter of 2021 are also robust, with SMEs lifting investment in new plant and vehicles, with the truck market looking particularly strong. The instant asset write-off is supporting this investment with 29% of SMEs using this stimulus compared to 24% in the last wave.

Table 4: Capital Expenditure (Next 3 Months)

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With all the good news it is pleasing to convey that only 9% of respondents (down from 18%) are now very concerned about their own health and wellbeing.

In summary, Christmas is looking more cheerful than expected and optimism regarding the New Year is strong amongst SMEs. While the road to recovery is a long one, the revenue and jobs data reported in this wave suggest that most SMEs are confident business will return to the new normal soon.

While new outbreaks continue to be disconcerting, SMEs are generally satisfied that the Government has the correct approach and protocols in place to prevent widespread infections that could quickly dampen consumer and business confidence.

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.

Topics: Market Research Healthcare Research Thought Leadership Research COVID-19 SME Tracker