As COVID-19 outbreaks and lockdowns continue, so does the stress for small and medium enterprises.
ACA Research’s most recent Small and Medium Enterprise (SME) Monthly COVID Tracker Report revealed that the majority of SMEs are concerned about their continued survival in the face of lockdown mayhem. The report revealed that 57 per cent are concerned about the future of their businesses.
This is in conjunction with findings showing continued declines in revenue. In the report, 56 per cent of SMEs reported lower revenue levels than pre-COVID-19. Of the business that recorded decreased revenue, 47 per cent attributed the decrease to COVID-19 restrictions and safety controls.
Lockdowns will further erode confidence
The extended lockdown placed on Greater Sydney and the continuing spread of the virus throughout the country is likely to have further eroded SME confidence since the survey was undertaken.
Managing Director of ACA Research, James Organ commented that “Sentiment will have declined further since the end of the fieldwork period on July 14th [as] lockdowns have been extended in Sydney and outbreaks continue to occur in other states.”
Mr Organ felt the mood amongst SMEs since the completion of the report has been “Very anxious and concerned”.
Federal government pays a price
An uncertain future and declining revenues have resulted in falling confidence in the economy, and frustration with the Federal government.
The report showed that vaccine uptake amongst SME owners was significant. In total, 88 per cent of SME owners were either likely to have the vaccine and or had already had the vaccine. The report also revealed that 60 per cent of SME owners would like to actively encourage their staff to take the vaccine, when available.
ACA’s report showed that while there was significant support for the vaccine by SME owners, frustrations are being felt at its slow rollout.
The report revealed that the majority of SME owners were unsatisfied by the Federal Government’s management of the pandemic. Sixty per cent were unsatisfied and this number is at an all-time high. These frustrations have been attributed to the previously mentioned vaccine rollout.
Mr Organ commented, “SMEs are bearing the brunt of the lockdowns, due to the perceived mismanagement of the vaccination by the Federal Government. Also, at the time of fieldwork financial support initiatives were uncertain and hence this also would have an impact on approval levels.”
Since ACA’s report, financial support measures for SMEs have been strengthened and clarified by the Federal Government. However, Mr Organ believes that should prolonged lockdowns continue, “The government will have to provide significant financial support otherwise widespread bankruptcies are likely.”
The report also showed that despite lowered business confidence, employment figures continued to trend upwards. The number of SMEs hiring had increased since June, up to 32 per cent. The report showed that competition for staff was high, and hiring had become more difficult since the pandemic. The report found that 57 per cent of SMEs were having more difficulty hiring. This change in the job market may encourage SMEs to retain their staff.
Lockdowns’ impact on employment
However, the situation has changed since the completion of ACA’s report. Commenting on the employment figures, Mr Organ said, “SMEs with job vacancies in July were expecting lockdowns to be shorter and hence had no strong reason to stop recruitment, especially as new staff are difficult to find. I expect these job vacancies to decline in August as the uncertainty increases. Hopefully, most SMEs can keep existing staff with the help of Government support.”
Other key findings
- 26 per cent of decision makers believe the Government should immediately relax restrictions on labour migration to allow access to more workers
- As expected, a large increase in the number of staff working from home with this increase led by VIC and NSW
- Working from home continues to work well for the majority, with productivity of staff remaining positive
- Demand for additional finance over the next three months continues on an upward trend. This is likely to continue as cash-flow becomes an issue during lockdowns.
- Confidence in local and global growth over the next three months has also declined with one third of SME decision makers expecting weakness
SMEs have felt the full force of COIVD-19 lockdowns and restrictions of the past 18 months. With business still in decline, concern and anxiety continues to grow.