The latest SME Growth Index by non-bank SME business lender ScotPac has revealed an improvement in SME confidence levels, though some figures remain a cause for concern.
Overall, 59 per cent of SMEs expect to see half-year revenue growth, which is nearing the record high of 62.6 per cent achieved in 2014. However, this was tempered by one-third of businesses stating that they expect revenue to decline.
The Index noted that the average projected revenue growth rate across all SMEs nationally was 1.4 per cent, with the most positive business flagging 18 per cent revenue growth and the most pessimistic predicting a 30 per cent decline, a vast 48 percentage point gap.
Mining-related SMEs are the nation’s most optimistic, predicting average revenue growth of 6.3 per cent, while construction SMEs are the most pessimistic, anticipating revenue to fall by 8.3 per cent.
At a state level, Queensland SMEs registered the highest confidence levels with an average revenue growth forecast of 10 per cent, and WA SMEs were the next most positive at 7 per cent. Victoria remains the only state with negative revenue expectations, with SMEs projecting an average 9 per cent decline.
ScotPac group executive, client acquisition, Craig Michie, said that despite the patchy national results, it was encouraging that most SMEs are projecting a short-term revenue increase.
“Considering the cost challenges SMEs faced in 2024, it’s great news that average revenue forecasts remain in the black,” Michie said. “The surge in optimism from businesses in resource-rich states shows no signs of slowing, while SMEs with tight margins or high exposure to discretionary spending are understandably more cautious about the future.”
ScotPac expressed caution as well regarding the challenges facing business owners ahead with the super guarantee set to rise again in July, and the ongoing uncertainty around tariff policies.
However, with inflation and interest rates expected to ease in the coming months, the lender believes that SME confidence levels will be rising across more states and sectors.
