Some positive signals have emerged for Australian businesses, with ABS data showing higher rates of new business entry and lower rates of exit.
The newly released data from the ABS, which counts the number of Australian businesses, found that in 2020–21, there was a 3.8 per cent increase in the number of businesses. This included a 15.8 per cent entry rate and 12 per cent exit rate.
The number of new businesses started in 2020–21 was 356,480, higher than it has been in the past three years, and up from a low of 336,499 new businesses in 2019–20. At the same time, there were 277,674 business exits in 2020–21, the lowest it has been in three years, since 2017–18 recorded 273,237 exits.
MYOB general manager for SMEs Emma Fawcett said the ABS data shows Australian businesses have “responded positively in what has been a tumultuous 12 months” and that the lowest business exit rate in the last three financial years “is a sign of hope for Australia”.
She added that MYOB’s own anonymised data shows small businesses have been bolstered by faster payment times across the last 12 months.
“Payments for 9 per cent of businesses performed better in FY20–21 compared to FY19–20, with invoices receiving payment within an average of 28 days. This is great news for Australia’s small businesses and the economy,” Ms Fawcett said.
“Less businesses shutting their doors and more businesses starting, coupled with businesses getting paid faster, leads to more growth for businesses, more jobs creation and money flowing through the economy.”