SMEs cautiously optimistic despite further staff cuts as JobKeeper ends

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 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.

Table 1: Recovery Expectations (Next 3 Months)

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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.

Table 2: Approach to Growth in 2021

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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.

Table 3: JobKeeper

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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.

Table 4: COVID-19 Vaccination

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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.

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.

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

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