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SMEs cautiously optimistic despite further staff cuts as JobKeeper ends

MEDIA RELEASE: March 30 2021: Cautious optimism continues to underpin SME sentiment, despite 54% reporting lower revenues due to COVID-19 and 29% reporting an operating loss in February.

With minimal new cases and the ongoing rollout of the vaccination across the World, 50% of SMEs expect economic conditions in Australia to strengthen over the next 3 months and nearly 30% are confident global conditions will also improve.

However, SMEs recognise that the conclusion of JobKeeper could impact the recovery. Accordingly, only 14% of SMEs are focused on growth over the next 12 months, with the majority (52%) looking to consolidate revenues and deliver profitability. Consequently, capital investment and wage growth will be limited for the foreseeable future.

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

It is inevitable that further job losses will transpire amongst the 16% of SMEs still accessing JobKeeper, but it is positive to note that 45% of these SMEs claim they will keep all staff once JobKeeper ends. In addition, one fifth of SMEs are currently advertising vacant roles.

The demand for the vaccination amongst SME decision makers is strong with 70% likely to get the jab when available. Furthermore, 12% of employers will make the vaccination mandatory for employees in their workplaces. Larger businesses (20+ employees) and those in hospitality, are more likely to push the need for vaccinations. Surprisingly, the retail industry is the least inclined with only 7% insisting on vaccinations.

ACA Research, Managing Director, James Organ said: “In summary, market conditions continue to be challenging for SMEs, but optimism is increasing as revenue, profit and economic indicators all slowly trend upwards.

However, caution will remain high as SMEs navigate the post JobKeeper phase and monitor the rollout of the vaccination. Consequently, business investment will continue to be subdued across most segments.”

Website: ACA Research

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