The latest edition of the ACA Research group’s COVID-19 SME Tracker revealed that 35 per cent of SMEs believe economic conditions will improve over the next three months, but with the backdrop of the Russian invasion of Ukraine, the report noted that confidence is likely to decline once more in the short term.
The report showed that revenues were slightly improved in February, but profit margins continue to be under pressure as rising operating costs persist. Only 39 per cent of SMEs achieved a profit last month, compared to 53 per cent recorded in December.
In line with the latest Australian Bureau of Statistics data, the report found that the proportion of SMEs with job vacancies has again spiked to 29 per cent compared to 23 per cent in January.
This was an indication that businesses are finding it harder to retain staff with the proportion of SMEs replacing employees in existing roles continuing to rise.
Conversely, the proportion of SMEs finding it very difficult to recruit staff has decreased to 33 per cent in February compared to 45 per cent in December. However, as competition for staff remains high, 22 per cent of SMEs expect wages to increase over the next three months.
More than 40 per cent of the businesses surveyed said they were dissatisfied with the performance of the federal government and as fuel prices continue to reach record levels, more SMEs are considering buying an electric vehicle (15 per cent).
“Sentiment is more positive than reported in January, but SMEs remain cautious as operating costs and wages continue to impact profit margins,” ACA Research, managing director, James Organ, said. “It is positive to report the rise in confidence, although it’s likely that sentiment will decline if the Russian invasion of Ukraine is prolonged.”
