28th April, 2020
SME business sentiment research reveals concerns about survival across the country as the impact of COVID-19 pushes us towards recession.
A growing number of Australian small businesses across all industry sectors are increasingly concerned about surviving the COVID-19 crisis, new research reveals.
The COVID-19 SME Weekly Tracker reveals that the number of SMEs concerned about their survival has jumped from 33 per cent to 41 per cent. Industries where revenue drops are most prolific are particularly concerned – such as the hospitality, retail and construction sectors.
Concern is also increasing among micro-businesses of less than five employees. This cohort represents the vast majority of small businesses within Australia.
Concern is so great that 35 per cent of SMEs have reduced their headcount, including one in five (21 per cent) slashing staff numbers by more than 50 per cent.
In larger SMEs (100-500 employees), more than 70 per cent report a reduction in staff. Additionally, 48 per cent of businesses have reduced staff wages.
Despite these increasing levels of concern and job cuts, satisfaction with the Federal Government’s stimulus package; including the JobKeeper program; has increased to 58 per cent, up from 54 per cent last week.
Meanwhile, since the announcement of the commercial rent relief package, there has been a slight positive shift in satisfaction with the stimulus package for businesses.
While businesses are relieved by government assistance and appreciate every bit of help they can get, confusion around eligibility, the complexity of the application process and hence the fairness of the package is driving some dissatisfaction among SMEs, the research found.
Personal health concerns still remain high among SME decision makers, but this has dropped to 64 percent, compared to 74 percent last week.
There has also been a slight decline in business owners concerned about their ability to pay their personal expenses.
It’s also positive that the proportion of SMEs reporting a decline in revenue due to the COVID-19 crisis has remained steady at 65 per cent. This suggests that one third of businesses have avoided any serious financial damage and hence will be well positioned as economic activity increases.
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The research is conducted by business market research firm ACA Research in partnership with TEG Insights. It sets out to track the impact of COVID-19 across more than 300 SMEs across all sectors, including metro and regional locations.
ACA Research managing director James Organ says the research reveals that the SME landscape remains in a very vulnerable state, with growing concerns about business survival in the wake of COVID-19.
But, there are some underlying signs that the worst may be behind us, with SMEs showing growing confidence that the Government stimulus will provide the necessary support to get through the crisis, said Organ.
“Business decision makers in SMEs are becoming more positive about the Government stimulus package, the actions taken to stop the spread of the virus and the ongoing communication. With payments starting to flow into SME bank accounts very soon, we will be watching these satisfaction levels with interest,” said Organ.
“With an increasingly positive response and support measures and the ongoing flattening of the curve, we’re also cautiously confident that the health and wellbeing of SME decision-makers will continue to improve,” he added.
The weekly tracker was launched on 3 April this year. All respondents are financial decision makers in SMEs, and data is weighted by state and number of employees to reflect the national distribution of businesses across the country.