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 despite a tough August, SME expectations regarding short term revenues continue to improve across all states, including Victoria. 25% of SMEs now predict their revenue to increase over the next 4 weeks, compared to 17% in August. Accordingly, 38% now expect revenues to be at pre-COVID levels by the end of 2020, compared to the lows of 34% reported in previous waves.
Table 1: Future Revenue Expectations
With the imminent changes to JobKeeper, it is positive to report most SMEs (61%) using the program will continue to support all eligible staff when the payments are reduced. It is also encouraging that 20% of SMEs expect to withdraw from the program as their revenues will have recovered sufficiently by October.
Table 2: JobKeeper Extension
Despite slightly higher levels of optimism, SMEs have less confidence in both the State and Federal governments. As a result of the ongoing bickering and perceived lack of collaboration, only 55% of SMEs are now satisfied with how the Federal Government is managing the crisis. This is a sharp drop, from 69% only two weeks earlier. Furthermore, satisfaction with all State governments has declined, including Victoria where 44% of SMEs are now dissatisfied.
Table 3: Satisfaction with the Federal Government's Response
Clearly the exchange of rhetoric between various Governments is disconcerting for many SME decision makers. This is evidenced by an increase in the number of SMEs concerned about the survival of their business (up 6% to 64% in the last 2 weeks).
Table 4: Level of Concern About Business Survival
Concern regarding business survival is heightened amongst SMEs struggling to access finance (43% of those needing finance have been unsuccessful).
In summary, optimism is growing with SME decision makers feeling slightly more confident. Seemingly the second wave is under control and therefore SMEs are expecting economic activity and revenues to increase as restrictions ease and borders reopen.
However, the lack of collaboration between State and Federal Governments is not well received and hence support is dwindling. As cashflow stimulus, rental relief and JobKeeper support are all reduced or withdrawn over the short-medium term it is critical that Government leaders reunite to provide a clear pathway forward for SMEs concerned about their future.
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.