Fewer than half of Australian small businesses expect revenue growth through to April next year, new research shows.
ScotPac and East & Partners surveyed 1252 businesses across the country as part of its twice-yearly research into the small business sector.
ScotPac chief executive Jon Sutton said of the small businesses surveyed, 47 per cent were expecting revenue growth through to April 2021, with a quarter forecasting revenue to decline.
“In the midst of Australia’s first recession in 30 years, a record-low number of SMEs have positive revenue growth aspirations,” Mr Sutton said.
However, there was massive variance, by state and industry, in revenue forecasts for early 2021.
In Victoria, 4.6 per cent of businesses expected positive growth, while 69.1 per cent forecast negative growth and 26.3 per cent felt there would be no change.
It was a stark contrast with the hard-bordered Western Australia, where 80.7 per cent of businesses believed they would have positive growth, with 3.5 per cent citing negative growth and 15.8 per cent predicting no change.
Similarly, SA-NT businesses were upbeat, with 76.3 per cent predicting positive growth, 11.3 per cent negative and 12.5 per cent indicating no change.
NSW businesses were divided, with 57 per cent forecasting positive growth, 13.5 per cent negative growth and 29.5 per cent no change.
There was also a significant split in views in Queensland, with 42.7 per cent of businesses indicating positive growth, 8.9 per cent negative growth and 48.4 per cent no change.
“Revenue forecasts for the small business sector are less ‘doom and gloom’ than might be expected after such a challenging 2020, and highlight the resilience of the SME sector,” Mr Sutton said.
In a sign that government support during the pandemic has been effective, since March the number of small and medium sized businesses forecasting a revenue decline has moved only one percentage point.
“It will be interesting to see whether revenue forecasts were kept artificially high because federal government’s stimulus measures were still in place, allowing many SMEs to ‘keep the lights on’ without having to commit to investing significantly in their businesses,” Mr Sutton said.
“Those small businesses who have confirmed a clear strategy and who have secured appropriate funding will put themselves in the strongest position to face what 2021 has in store.”
Across different industry types there were differences of views on revenue prospects.
The retail SME sector is evenly split between those expecting revenue to grow, decline or remain steady.
Transport businesses were more confident, given the demand for online shopping over the pandemic.
Manufacturing and wholesale industries faced a hit in sales volume at the start of the pandemic, with signs of recovery during June and July followed by another decline in August and September during Victoria’s stage four lockdown, the research found.
ScotPac is Australia and New Zealand’s largest non-bank SME lender.