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 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.
Table 1: Decline in Revenue Due to COVID-19 by Size & State
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.
Table 2: Expectations Regarding Economic Conditions (Next 3 Months)
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.
Table 3: Job Vacancies
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.
Table 4: Satisfaction with the Federal Governments Response
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.
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.
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/ TEG Insights 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.