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 sentiment amongst SMEs throughout Australia is slightly lower across many key performance indicators including revenue, profit, employment and capital investment. It is evident that the ongoing issues surrounding the vaccine rollout dented business confidence and this is unlikely to reverse now that Melbourne is once again in lockdown.
Table 1: Decline in Revenue Due to COVID-19
The proportion of SMEs reporting lower revenues than before the pandemic has slightly increased to 46% compared to 43% in April. However, the average revenue decline remains at 14%. Less demand from existing and new customers driven by COVID restrictions and international border closures continues to weigh on many SMEs.
Table 2: Reasons Revenue Has Not Recovered
Despite slightly subdued data, the proportion of SMEs now hiring has risen to 25% from 23% in April. However, 94% of these businesses claim it is difficult to fill vacant roles, including 40% that believe it is more difficult than it was prior to the pandemic.
Table 3: Job Vacancies
In line with other data, confidence in local and global economies has declined slightly and therefore expectations regarding business investment over the next 3 months has dropped to 24% from 26% in April. However, as we approach the end of the financial year, expectations regarding investment in technology and office equipment is increasing.
Table 4: Expectations Regarding Business Investment (Next 3 Months)
In summary, market sentiment in May was softer. Clearly, some SMEs were impacted by the end of JobKeeper, but the ongoing issues associated with the vaccine rollout also affected confidence.
With Melbourne now in lockdown for the fourth time it is unlikely sentiment will rebound In June, unless restrictions are lifted quickly.
Access to skilled staff is also becoming a major problem for many SMEs and hence the Government will be under significant pressure to allow skilled workers into Australia to support the ongoing recovery.
Please click on this link to access the full report including subgroup analysis by industry sector, size of business and State. Fifth Quadrant and 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.