MEDIA RELEASE: March 2 2022: Sentiment amongst SMEs is cautiously positive with a rebound in confidence regarding Australian and Global economic conditions. 35% of SMEs believe economic conditions will improve over the next 3 months, but with the backdrop of the Russian invasion of Ukraine confidence is likely to retrace in the short term.
Revenues were slightly improved in February, but profit margins continue to be under pressure as rising operating costs persist. Only 39% of SMEs achieved a profit last month, compared to 53% in the December wave of the research.
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.
Despite ongoing challenges, the proportion of SMEs with job vacancies has again spiked to 29% compared to 23% in January. As expected, staff retention is becoming more difficult, with the proportion of SMEs replacing employees in existing roles continuing to rise. It is positive to report a downtrend in the proportion of SMEs finding it very difficult to recruit, down to 33% in February compared to 45% in December. However, as competition for staff remains high, 22% of SMEs expect wages to increase over the next 3 months.
Support for the Federal Government continues to be weak with 41% of SMEs now dissatisfied. This compares to 44% last month.
With the price of fuel increasing, it is not surprising to report that the demand for electric vehicles is increasing amongst SMEs with 15% indicating they will consider purchasing over the next 3 months compared to 8% in January.
ACA Research, Managing Director, James Organ said: “In summary, sentiment is more positive than reported in January, but SMEs remain cautious as operating costs and wages continue to impact profit margins. It is positive to report the rise in confidence, although it’s likely that sentiment will decline if the Russian invasion of Ukraine is prolonged.”
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 8th-18th February 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.