COVID-19 News & Views

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SMEs Remain Cautious, but Sentiment Continues to Strengthen

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

The latest wave of the COVID-19 SME Research Tracker shows that the green shoots reported in September continue to grow as lockdowns and restrictions are lifted. While many SMEs remain cautious, sentiment regarding economic conditions and short-term revenue growth is rebounding quickly.

While 57% continue to report lower revenues than before the pandemic, 38% expect economic conditions to improve over the next 3 months and 32% expect their revenues to increase in November, compared to 24% in the last wave.

Table 1: Decline in Revenue Due to COVID-19

First slide

While employment numbers remain subdued with only 18% of SMEs looking to fill positions in October (down from 21% in September), we are likely to see this figure climb as the economy strengthens in the run up to Christmas. Accordingly, 40% of SMEs believe skilled migrants should be allowed to enter Australia immediately.

Table 2: Job Vacancies

Second slide

Despite the ongoing increase in business sentiment, capital investment is not likely to increase significantly over the next 3 months as SME decision makers take a cautious approach, waiting for more clarity regarding the strength and speed of the economic recovery.

Table 3: Expectations Regarding Business Investment (Next 3 Months)

Third slide

In line with the expected rebound, satisfaction with the Federal Government has increased from lows of 30% in August, to 38% this month. The negative sentiment in NSW has also diminished with the end of lockdowns. Support for the new premier seems strong with 50% satisfied compared to the 24% reported in September before the change of leadership.

Table 4: Satisfaction with the Federal Government's Response

Fourth slide

SME decision makers remain positive in relation to the vaccination roll out with 96% intending to get vaccinated up from 92% in September.

In summary, revenue and employment data remain weak amongst SMEs, but with the end of lockdowns the level of optimism continues to grow and hence concerns about business survival and health and wellbeing have subsided.

While SMEs remain cautious it is likely sentiment will strengthen over the next 2-3 months as SMEs benefit from an increase in consumer spending.

Please click on this link to access the full report including subgroup analysis by industry sector, size of business and State. ACA Research and Ovation Research will publish updates of this research to track the impact and response to COVID-19. Hopefully the results will continue to become more positive as we work through this crisis together.

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