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 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.
Table 1: Profit
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.
Table 2: Job Vacancies
It is however 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.
Table 3: Job Vacancies
Support for the Federal Government continues to be weak with 41% of SMEs now dissatisfied. This compares to 44% last month.
Table 4: Satisfaction With The Federal Government's Response
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.
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.
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 continue to become more positive as we work through this crisis together.