Most SMEs have forecast positive enterprise growth in the next 6 months, but a third predict falling

A robust 56% of Australian SMEs are forecasting positive enterprise revenue over the next six months – the strongest growth outlook for the sector since March 2016.

The fact that more than half of our SME owners are predicting revenue growth is both remarkable and encouraging when you consider the rising cost of doing business, particularly in key areas like wages, energy and interest rates.

However, at the opposite end of the scale, 31% of SMEs are predicting their revenue will contract in the next six months, by an average of 8.5% – both record high figures for ScotPac’s SME Growth Index.

This finding confirms that tough economic conditions and the end of government COVID relief measures in the past 12 months is taking a toll on cashflow dependent SMEs. It is further evidenced by a 61% rise in insolvencies from October 2022 to March 2023 compared to the same period a year earlier.

The average revenue growth projection across all SMEs tipped into the positive at +2%.

Key Findings:

  • 56% – SMEs forecasting positive enterprise revenue in the next six months by an average of 8%
  • 31% – SMEs predicting contracting revenue in the next six months by an average of -8.5%
  •  -20% to +12.5% – record high spread for Australian SME growth projections

Top takeouts for SMEs and brokers

The six-month growth projection findings are a clear indicator of the two-speed economy that currently exists for Australian SMEs.

Whatever their stage of growth, all SMEs are operating in an environment of rising costs and changing consumer behaviour, which often requires a change in approach.

In times of uncertainty, it is more important than ever for SMEs to reach out to their brokers and advisors, and vice versa.

The fact is a lot of SME owners are not aware of the range of financial management tools and support options available to make running their business easier.

For some, invoice finance is a great tool to access money owed from clients faster, providing capital for growth without delay. For others, an online business loan may be the right solution to manage costs, such as ATO debts.

ScotPac understands that all businesses can benefit from access to fast and flexible finance, and we have the broadest range of products to suit businesses at every stage of their growth

About the SME Growth Index

ScotPac’s bi-annual SME Growth Index, is Australia’s longest running research report on SME sentiment towards revenue growth prospects.

The Round 18 research was conducted by East & Partners who interviewed 720 SME enterprises with annual revenues of A$1-20 million in February 2023.

SMEs surveyed have operated continuously for 14.2 years and manage an average of 59 full time employees.

Sectors represented in the survey included Manufacturing (14%), Property & Business Services (14%), Retail (11%), Wholesale (11%), Personal / Other Services (10%), Construction (10%) and other industries including Transport & Storage, Mining, Agriculture, Media, Hospitality, Finance & Insurance (non-bank) and Electricity.

ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion revenues. For more than 30 years ScotPac has helped thousands of business owners succeed, offering fast and flexible funding. From simple to complex, small to large, start up, growth or turnaround – ScotPac can help with a range of funding from Invoice, Trade or Asset Finance to Home Loans and Business Loans.