MEDIA RELEASE: February 8 2022: The stronger data reported by SMEs in December was short-lived as expected. With the Omicron variant peaking in January, revenue, profit and employment data all declined along with sentiment regarding global and local economic conditions.
54% of SMEs reported a revenue decline due to COVID-19, up from 50% in December. SMEs in NSW had a tough January with 70% reporting softer revenues due to the pandemic. It is however positive that 19% of SMEs have now increased revenue during the pandemic and that the average drop is 15%, trending down from 22% in October. Accordingly, it is evident that SMEs are learning to live with COVID-19.
However, SME decision makers expect difficult business conditions over the next 3 months, with more than 40% expecting economic conditions to weaken locally (40%) and globally (43%). Despite these short-term challenges, 39% of SMEs are expecting growth in the next 12 months.
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.
With the higher case numbers and weaker business confidence, it’s not surprising that less SMEs (23%) were recruiting in January compared to December (26%). Regardless of declining employment and wage data, capital investment and demand for finance remain positive particularly in the IT/Office equipment category. We also continue to see rising demand for plant, equipment, and small trucks.
Support for the Federal Government continues its recent decline with 43% of SMEs now dissatisfied, compared to 30% in November. It looks like a tough road ahead as we draw closer to the election.
ACA Research, Managing Director, James Organ said: “In summary, the expected dip in sentiment was realised in January. However, now that Omicron cases appear to have peaked, we do expect a rebound in confidence as SME revenues once again recover following a challenging holiday period.”
About the COVID-19 SME Monthly Tracker
• Based on responses from ~400 SMEs with up to 500 employees across all sectors in Australia, including metro and regional locations.
• This wave includes data collected from 10th-24th January 2022.
• Each respondent is a financial decision maker/ influencer in their business. • Data is weighted by state and number of employees to reflect the national distribution of businesses across the country.