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SME confidence plummets as delta takes a stranglehold on the economy

MEDIA RELEASE: September 1 2021: Confidence amongst Australian SMEs has plummeted, as they continue to bear the brunt of the latest lockdowns and restrictions. More than 50% of decision makers are reporting declines in revenue, with NSW the hardest hit. Furthermore, 34% of SMEs reported a loss in the previous month.

Accordingly, it is not surprising that nearly one quarter of SMEs are now shuttered including 4% that have closed operations permanently.

Clearly confidence regarding the Australian economy is now in steep decline with 55% expecting a weaker economy over the next 3 months. The outlook in relation to the global economy is not much better with 43% expecting a negative outcome running into the important Christmas period.

The COVID-19 SME Tracker is conducted by leading business market research firm ACA Research in partnership with Ovation and tracks the impact of COVID-19 across more than 400 small and medium enterprises each month.

The number of businesses hiring has also retracted, dropping to 25% (down 7% since July). Despite new Government support measures, it is likely this is the inception of a negative trend with the impact on jobs worsening over coming weeks.

With SME sentiment now at its lowest point this year, we can also report that only 30% of SMEs are now satisfied with the Federal Government’s handling of the pandemic. This is down from 53% In June.

On a positive note, SME decision makers continue to lead the way through vaccinations with 92% intending to get vaccinated, up from 79% in June.

ACA Research, Managing Director, James Organ said: “In summary, expanded lockdowns and restrictions have accelerated the negative impact on key financial indicators and sentiment. This trend is likely to continue until vaccination targets are met and restrictions eased.

With one quarter of SMEs now shuttered (some permanently) it is looking increasingly likely that employment and capital expenditure will decline sharply during the next 3 months.”

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Join James Organ and Steve Nuttall at Fifth Quadrant & ACA Research as they discuss the latest key insights and implications from the Tracker. Please click here to register.

Website: ACA Research

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