SME economic confidence hit by rising fuel prices

Inside Small Business

The latest data from business management platform MYOB reveals that small-to-medium enterprises (SMEs) are less confident about Australia’s economic future as they were six months ago, with 53 per cent anticipating improvement in the next 12 months, down from 57 per cent in June 2021.
The research shows that the finance and insurance sector is most likely, at 70 per cent, to anticipate economic improvement over the next 12 months, while construction and trades are more pessimistic at 41 per cent. And 68 per cent of the transport, postal and warehousing services believe the economy will improve, which the research attributes to an increase in online shopping during COVID.
The research also notes that for the first time since COVID-19’s initial outbreak in Australia, the virus is actually not the foremost pressure facing SMEs, but rather the fuel prices, which has caused 41 per cent of respondents “extreme” or “quite a lot” of pressure. The pandemic is second on the list at 34 per cent, followed by the cost of utilities at 31 per cent.
While smaller businesses are concerned with fuel prices and utilities, mid-size enterprises are concerned about attracting new customers at 44 per cent compared to a national average of 26 per cent, upgrading IT software and syste at 35 per cent compared to 16 per cent national average, and exchange rates concerning 33 per cent compared to a national average of 18 per cent.
With regards to their financial health, 41 per cent of SMEs said their revenue is the same as it was a year ago, 25 per cent saw their revenue increase, while revenue decreased for 33 per cent of SMEs, with the COVID-19 pandemic being the key driver for those who saw a decline (66 per cent).
Emma Fawcett, MYOB General Manager, SME following the challenges of the last 24 months, Australia’s small-business operators will need to remain resilient as they plan for the year ahead.
“Hopefully, 2022 brings a period of stability that will enable them to back their businesses, their revenue predictions and their growth plans, to ensure the success of a sector that makes up 95 per cent of Australian businesses.”

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