SMEs are increasingly concerned about the state of the national economy, according to MYOB – not good news for our political leaders in the midst of an election campaign.
In the latest MYOB Business Monitor survey, 42 per cent of the 1,000-plus SME respondents said they feel the economy will decline over the next 12 months.
There was also an evident belief that sales will decline over the next three months. This does not bode well when compared with the previous Business Monitor survey.
Increases are down, decreases are up
In October last year, 38 per cent of SMEs were expecting increased sales, and 19 per cent were expecting a decrease in sales.
In comparison, this year only 34 per cent expected increased sales, and 24 per expected decreased sales.
According to MYOB CEO Tim Reed, the Australian government isn’t doing enough to placate the fears of SMEs.
“The latest MYOB Business Monitor clearly shows many SME operators are still concerned about the underlying strength of the Australian economy,” said Mr Reed.
“The pessimistic SME sentiment revealed in the MYOB Business Monitor should be a wake-up call for all politicians who care about this vital sector as we approach the federal election. It reinforces the need for policies that will stimulate the economy and lead to growth.
“Despite a range of election initiatives promised to help businesses get ahead, business owners still don’t feel confident that the economy has turned the corner.
“We had been looking for signs of improvement, but the gloomy sentiment has now been consistent over the past three MYOB Business Monitor surveys.
“Uncertainty from the election may be contributing to this unease.”
The biggest concerns
The biggest concerns facing SMEs this year, in order, were found to be:
- Cash flow problems,
- Competitive activity,
- Fuel prices,
- Attracting new customers, and
- Profitability and price margins.
These concerns were the same as last year’s, albeit ranked differently.
However, the results weren’t all bad.
The silver lining
Nearly half of all new SMEs said they are likely to see financial growth, including 49 per cent of start-ups, 41 per cent of new businesses and 47 per cent of franchisors.
SMEs with an online social media presence and/or a business website also predicted revenue growth – 38 and 36 per cent of SMEs respectively.