(12 December 2022 – Australia) Rising inflation and increased costs are being offset or absorbed by Australian SMEs quite differently, ScotPac’s latest SME Growth Index has revealed.
ScotPac’s biannual SME Growth Index is Australia’s longest-running research report on SME sentiment towards revenue growth prospects. The 17th consecutive round of research, conducted by East & Partners, found all 718 SMEs directly interviewed as part of the index with annual revenues of A$1 million to A$20 million in August 2022 covering the six months to September 2022 indicated some form of supply chain disruption.
The index found one in four SMEs nominate a need for alternate business funding tools, such as invoice finance (25 percent) to help navigate supply chain and logistics issues, one in five highlighted a general risk advice and guidance requirement (20 percent) and 16 percent outlined new supplier network referrals as a requirement. 75 percent of SMEs reported their cost base expanded by an average of 15 percent due to inflation and other input cost rises.
“Despite the easing of COVID restrictions in 2022, severe pockets of supply chain disruption were still being felt by SMEs” commented ScotPac CEO Jon Sutton.
“Supply chain disruptions affect a huge range of the goods and services we rely on every day, and the businesses that supply them. Anyone who has tried to buy a new car in the past two years will have first-hand experience.”
“Just this week we have seen reports of pallet shortages that could impact the delivery of food, groceries and medicines to supermarkets and pharmacies across the country, which again will affect the cost of doing business. A lot of business owners we work with are looking to invest in making their supply chains more resilient by purchasing reserve inventory, building or leasing warehouse space, sourcing additional suppliers or adding digital solutions.
“ScotPac has the breadth of products and experience to help more businesses invest in their supply chain than any other non-bank lender; however, we know that many SMEs are not sure how to fund purchases or upgrades. That is why we encourage SMEs to talk to their advisors about releasing working capital through options like invoice or asset finance because you may have more solutions available than you realise.”