(10 April 2026 – Australia) Conflict in the Middle East and the resulting disruption to global supply chains are having a knock-on impact for Australian SMEs, placing renewed pressure on input costs, freight routes and cash flow.
Geopolitical tensions and rising supply chain shocks are creating a widening divide across Australian businesses. Businesses with exposure to fuel, transport, fertiliser and other globally traded inputs are particularly vulnerable, with disturbances expected across construction, agriculture, logistics and manufacturing supply chains.
At the same time, conditions remain uneven across the SME economy, with some sectors continuing to perform strongly while others face tightening margins and increasing operational pressure.
The latest ScotPac SME Growth Index Report – based on direct interviews with SMEs conducted by East & Partners shortly before the current conflict in the Middle East broke out – was the most polarised in the 12-year history of the Index.
- 59 percent of SMEs expected short-term revenue growth, with forecasts ranging from 3 percent to as high as 20 percent.
- 36 percent of SMEs projected revenue to decline over the following six months, up 9 percent year-on-year.
- Only five percent of SMEs expected no change in revenue, down sharply from 29 percent in 2020, which highlights the increasing pressure SMEs face in a more volatile operating environment.
“Current global conditions are now creating a more complex and volatile operating environment for SMEs. We’re seeing a clear split between businesses that are more exposed to rising costs and supply chain disruption, and those that remain well-positioned to take advantage of growth opportunities” commented ScotPac CEO Jon Sutton.
“There are clearly significant dislocations building in the global economy that will flow through to Australian businesses. The current geopolitical instability is already impacting key supply chains – particularly fuel, freight and critical inputs – and those effects are likely to intensify in the near term. For SMEs, that means having a working capital strategy that can absorb shocks and protect cash flow as conditions change.”
Mr Sutton said the key risk for many businesses is not just higher costs, but the timing mismatch between rising expenses and incoming revenue.
“When costs move quickly but cash flow doesn’t, that’s when pressure builds. Businesses that can scale funding up or down in line with their cash flow are far better placed to navigate uncertainty and respond to changing conditions. Now is the time for SMEs to engage with their finance partners.”
“If businesses have concerns, they should be speaking with their finance providers early – don’t wait until the pressure is already building. We’re ready to support SMEs through both growth and disruption, but the key is acting early and having the right structures in place. Brokers and non-bank lenders like ScotPac will play a critical role in helping businesses manage both volatility and opportunity in the months ahead.”
About the SME Growth Index
- Commencing in March 2014, ScotPac’s twice-yearly SME Growth Index is Australia’s longest-running research report on SME sentiment towards revenue growth prospects.
- The Round 24 research was in November 2025 and conducted by East & Partners who interviewed 728 SME enterprises with annual revenues of A$1-20 million.
- SMEs surveyed have operated continuously for an average of 16.3 years and manage, on average, 51 full-time equivalent employees.
- Sectors represented in the survey included Property & Business Services (14 percent), Wholesale (13 percent), Manufacturing (12 percent), Retail (10 percent), Transport & Storage (10 percent), Personal & Other Services (10 percent), Construction (10 percent) and other industries including Mining & Resources, Agriculture / Forestry / Fishing, Media & Telco, Accommodation, Cafes & Restaurants, Finance & Insurance (non-bank) and Electricity, Gas & Water.