More SMEs forecasting positive revenue growth

Highest number since 2019 – but which state's businesses are the most optimistic?

More SMEs forecasting positive revenue growth


By Jayden Fennell

Western Australia small-to-medium businesses are the most optimistic SMEs in Australia – 87% are predicting positive revenue growth in the six months to March 2023, according to a new study.

This compares to just 15% of Victorian SMEs, ScotPac’s bi-annual SME Growth Index has found.

The “boom or bust” predictions from WA and Victoria are vastly different despite the fact these were the two states most affected by COVID-19 related lockdowns.

The non-bank SME lender’s index found Queensland SMEs were the second most optimistic state – projecting 77% growth. Meanwhile, NSW SMEs forecast 41% of growth, while a third of the other areas predicting no change in revenue.

ScotPac CEO Jon Sutton (pictured above) said across the nation and of 718 SMEs surveyed throughout August 2022, 54% were expecting positive six-month revenue growth to March 2023.

“This is the highest recorded figure since September 2019 (pre-pandemic) and the average growth forecast of 7% is the strongest recorded since the very first round of the SME Growth Index in September 2014,” Sutton said. “We found 27% of SMEs are anticipating a contraction in revenues in the six-month period by an average of 7.7%, which represents record low negative growth proportions and average revenue decline figures.”

Sutton said the wildly fluctuating forecasts highlighted that the Australian economy consisted of many different economies within one.

“A lot of West Australian industries are export focused on markets that are proving very resilient, like iron ore and lithium mining to support battery manufacturing, however Queensland has seen strong demand for its core tourism sector return as domestic and international visitors enjoy travel freedoms for the first summer since 2019,” he said.

“Internal migration from the southern states has also boosted business confidence. By contrast, Victoria is more service-industry focused and the road to recovery has been longer, but we are starting to see green shoots with some huge federal and state government infrastructure spending commitments that will have positive flow-on effects in industries like construction, labour hire, engineering and equipment and leasing.”

Sutton said the bi-annual SME Growth Index released in June and November was Australia’s longest-running research report on SME sentiment towards revenue growth prospects.

“The research was conducted by East & Partners who interviewed 718 SME enterprises with annual revenues of A$1 million to $20 million in August 2022. SMEs surveyed have operated continuously for 13.9 years and manage an average of 59 full-time employees,” he said.

“The sectors represented in the survey included manufacturing (14.5%), business services (14.1%), retail (11.4%), wholesale (11.0%), personal/other services (10.6%), construction (9.6%) and 28.8% all other industries including transport, mining, agriculture, media, accommodation, finance (non-bank) and electricity.”

Sutton said ScotPac, which acquired online lender Business Fuel in March, had been assisting business owners with tailored finance solutions at all stages of their growth cycles for more than 30 years and it had the breadth of product to help more businesses in more situations than any other non-bank lender.

“Whether it is helping SMEs purchase inventory as it becomes available or funding a new office or retail fit-out, we work with business owners and their advisors to unlock the value in their assets and contracts,” he said.

“We understand that speed and ease of transactions is key for SMEs, which is why applications, approvals and funds transfers for some ScotPac products can all occur within 24 hours.”

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