A new report from MYOB found that small businesses fear rising inflation and increasing interest rates will push the country into a recession.
Their uncertainty over Australian economic resilience has been supported by the release in November 2022, of a report by Deutsche Bank’s chief economist, Phil O’Donoghue, who predicted an increase in the unemployment rate by the end of 2023.
The MYOB Business Monitor report found that 52 per cent of small businesses believe the economy will be in recession by the end of 2023, while 57 per cent believe the economy will be in decline within the year.
Additionally, 31 per cent of small businesses have realised less (or no) profit and 30 per cent are passing added costs on to customers while another 39 per cent plan to increase prices in 2023.
The survey, including 1,000 SME owners and operators from across the country, took place between 8 November and 5 December last year.
“For the first time since the onset of COVID-19, the pandemic didn’t make the top five pressures facing SMEs,” said MYOB’s general manager of SME, Emma Fawcett.
“Instead, the main concerns are fuel prices, cost of utilities, interest rates, price margins and profitability, and cashflow.”
Ms Fawcett believes this trend towards prioritising short-term needs may indicate a general lack of confidence impacting the business community.
“Tellingly, these pressures centre on immediate business operations concerns, rather than looking at investment for future scaling or growth,” Ms Fawcett said.
“It suggests that businesses are focused on the most pressing and current challenges, rather than making bold, confident decisions about the future.”
Despite the pandemic no longer keeping business operators up at night, natural disasters in general continue to be front of mind.
Nationally, 24 per cent of respondents said they had been impacted in one way or other as a result of extreme weather events in 2022, where the number rises to 30 per cent in NSW specifically.
“Australian SMEs are resilient and have made the best of another extremely challenging year,” said Ms Fawcett.
“Lessons taken from the pandemic will hold small business owners in good stead, though it’s likely left many feeling uneasy.
In fact, 65 per cent of respondents said the pandemic made them more conservative or cautious in their planning.”
