Green Shoots for SMEs Despite Weak Revenue and Employment Data

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 as expected, the downward trend in SME revenues has continued. 57% now report lower revenues due to the ongoing lockdowns and restrictions with the average SME reporting a decline of 22%, compared to 17% in August. SMEs in all States are impacted, but in NSW more than two-thirds report lower revenues with the average decline rising to 30%.

Table 1: Decline in Revenue Due to COVID-19 by Size & State

Slide 1

The ongoing lockdowns are now impacting employment with 33% of SMEs reporting lower staff levels due to COVID, whilst the proportion of SME’s now recruiting sits at 21% compared to 32% reported in July. Despite less SMEs recruiting the level of difficulty has remained high with the lack of candidates applying, indicating Government support may be a disincentive to apply for paid work.

Table 2: Job Vacancies

slide 2-1

Despite the negative revenue and employee data, there are signs that sentiment is turning as we move closer to lockdowns ending. SMEs are less pessimistic regarding short term revenues and expectations regarding local and global economic conditions over the next 3 months are also more positive.

Table 3: Expectations Regarding Economic Conditions (Next 3 Months) ecnoomoy

However, the business investment outlook remains weak as SMEs need more certainty regarding ongoing economic conditions once lockdowns lift. Accordingly, capital expenditure intentions over the next 3 months have dropped sharply.

Table 4: Expectations Regarding Capital Expenditure (Next 3 Months)

table 4

Dissatisfaction with the Federal Government remains high at 43%. but this is a slight decrease from 45% reported in August. Negative sentiment in NSW has also plateaued, but once again the popularity of the VIC Government has nosedived with the latest lockdown.

Table 5: Satisfaction with the Federal Governments Response

fed gov

SME decision makers remain positive in relation to the vaccination roll out with 92% intending to get vaccinated, including 66% that had already received at least one jab by mid-September.

In summary, revenue and employment data remains weak amongst SMEs, but sentiment regarding economic recovery is turning as we move closer to the end of lockdowns.

Hopefully, SMEs will be the first to benefit when restrictions are lifted and consumer spending increases across all categories, especially as we run into the critical Christmas shopping period.

To talk through the findings of this report, Fifth Quadrant CX is hosting a webinar on Thursday 7th October at 12:00pm AEST. To register click here.

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

James Organ

Written by James Organ

I have been working in market research for nearly 30 years and remain dedicated to solving problems and creating great insight and content for our many clients.

Topics: Business Priorities strategic planning CX Articles & Insights market research

You might also enjoy reading...