(15 May 2023 – Australia) The latest ScotPac SME Growth Index reveals that while many SMEs are forecasting strong growth, others are predicting a record contraction in revenues over the next six months.
Based on direct interviews conducted by East & Partners with 720 SMEs across Australia with annual revenues of A$1 million to A$20 million in February 2023, the analysis shows the current economic situation is challenging for many businesses with significant variance exhibited for revenue projections.
The average projected growth rate of SMEs forecasting positive enterprise revenue over the next six months was 8 per cent, which is the most upbeat outlook in almost a decade. Additionally, the six-month revenue forecasts for SMEs ranged from -20 per cent to +12.5 per cent, which is a record spread for the SME Growth Index.
ScotPac CEO Jon Sutton highlighted the critical role the federal budget will play in SME confidence over the next 12 months and that challenging economic conditions and the end of government-backed pandemic relief measures are taking a significant toll on cash flow-dependent businesses in many parts of the sector.
“This is by far the largest spread of revenue growth projections we have ever seen in the SME Growth Index, which is consistent with surging rates of insolvency in the past quarter” Mr Sutton said.
“The Albanese Government has publicly stated that SMEs will be ‘front and centre of the May Budget. It is critical for the confidence of SME owners and operators that the Budget delivers some material support to address the increasing cost and compliance pressures they are facing” Mr Sutton added.
“There is no doubt that tough economic conditions and the end of government-backed pandemic relief measures in the past 12 months is taking a huge toll on cash flow-dependent businesses in many parts of the sector.”