The latest edition of the SME Sentiment Tracker reveals a challenging economic climate for SMEs remains challenging, with 38 per cent experiencing a drop in revenue in June. Worst hit of all sectors was construction, where 48 per cent of its SME enterprises saw a decline in revenue.
The research, conducted by Fifth Quadrant in conjunction with Ovation, shows that challenging economic conditions, high operational costs and weak consumer demand have presented 30 per cent of SMEs with significant financial challenges in the last 12 months.
As a result of these challenges 50 per cent of respondents have struggled with their physical and mental health, relationships and personal financial security.
The difficult economic environment, in conjunction with the increase in the minimum wage, has hit recruitment hard, with only 13 per cent of SMEs actively looking for candidates, the lowest percentage in 12 months. And only 10 per cent of respondents expect to advertise new roles in the next three months.
The situation is not expected to improve in the near future as high inflation and geo-political phenomena have led 56 per cent of respondents to expect conditions in Australia to worsen and 49 per cent to believe the global economy to decline. As a result only 21 per cent of Aussie SMEs are predicting expecting a revenue increase in the next four weeks, compared to 35% in February.
“In summary, revenue and sentiment continue the ongoing decline that commenced in early 2024,” Fifth Quadrant, Managing Director, James Organ said. “Accordingly, many SMEs are facing significant challenges, that not only impact their financial wellbeing but also their health and personal relationships. As reported last month recruitment data is at the lowest levels recorded over the past 12 months and hence, we continue to expect unemployment to rise soon.”
