More than half of Australia’s SMEs expect revenues to rise over the next six months, with the mining, agriculture and business service sectors leading the charge.
Despite six months marked by oil shocks, the introduction of Payday Super and mounting tax and compliance pressures, 56% of SMEs expect their revenue to grow.
Among those forecasting growth, the average increase is 12.7% – the strongest in the 12-year history of ScotPac’s SME Growth Index Report, and well above the previous high of 10.1% recorded a year ago.
ScotPac CEO, Clare Morgan said the result was a powerful demonstration of the resilience of Australia’s SME sector.
“Most SME owners continue to see opportunity ahead, even after a period of trade disruption, higher input costs such as fuel, economic and regulatory change,” Ms Morgan said.
“The standout finding is not simply that so many SMEs expect to grow – it is the scale of that ambition, reflected in the highest average growth forecast recorded by the Index.
“That confidence matters. SMEs employ millions of Australians and make an enormous contribution to innovation, investment and economic activity, so their willingness to keep growing is an encouraging signal for the broader economy.”
Widening SME Confidence Divide
While the overall SME outlook remains positive, the latest results also point to an increasingly disparate market.
- 37% of SMEs expect revenue to decline as 2026 draws to a close, with a record average forecast fall of 15%.
- Individual revenue growth projections span 49 percentage points, ranging from growth of 21.5% to a decline of 27.5%.
- Just 7.4% of SMEs expect revenue to remain unchanged, down sharply from 29% in the corresponding 2020 report.
Ms Morgan said that regardless of business phase, building financial resilience is key. “A two-speed SME economy requires two different conversations,” she said. “Growing businesses need fast funding that moves at the speed of opportunity, ensuring they can act quickly without exhausting their cash reserves. ”
“Businesses experiencing softer revenue need to focus on working capital management and optimising cash flow before temporary pressure becomes a more persistent problem.”
State and Sector Growth Picture
Six-month revenue expectations varied considerably across states and industries, reinforcing the increasingly uneven nature of Australia’s SME economy.
On a state-by-state basis:
- Western Australia recorded the highest proportion of growth-oriented SMEs, with 88% forecasting increased revenue over the next six months, followed by Queensland at 75%.
- NSW also exceeded the national average, with 63.5% of SMEs expecting revenue growth.
- By contrast, just 20% of Victorian SMEs two months our from a state election expect revenue to rise, while 70% are forecasting a decline.
While Western Australia had the greatest proportion of SMEs expecting growth, Queensland topped the national table for the strength of its overall outlook, with average forecast revenue growth of 7.3% across all businesses surveyed.
The sector results were similarly varied:
- Mining recorded the strongest confidence, with 85% of SMEs expecting revenue growth during the next six months.
- Business services followed at 81%, up sharply from 61% in 2024.
- Agriculture also performed strongly, with 76% of SMEs forecasting higher revenue- compared with 50% two years ago.
Confidence was considerably softer in industries confronting more difficult trading conditions. Just 18% of construction SMEs and 29% of manufacturing SMEs expect revenue to grow during the next six months.
Flexible funding supports opportunity
Ms Morgan said the results demonstrated that strong growth opportunities remained available despite an uncertain national and international environment.
“Australian SMEs clearly remain determined to invest, expand and pursue new opportunities,” Ms Morgan said.
“To achieve that, access to fast and flexible funding, supported by rigorous cash flow management, has never been more essential.
“ScotPac has more than 35 years of experience and the largest suite of finance products in the market to help SMEs succeed.”
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About the ScotPac SME Growth Index
- Commencing in March 2014, ScotPac’s twice-yearly SME Growth Index is Australia’s longest-running research report on SME sentiment towards revenue growth prospects.
- The Round 25 research was conducted by East & Partners who interviewed 727 SME enterprises with annual revenues of A$1 million – $20 million.
- SMEs surveyed have operated continuously for an average of 16.6 years and manage, on average, 50 full-time equivalent employees.
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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 in revenues. For over 35 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 including Invoice Finance, Trade Finance, Asset Finance, Line of Credit, Business Loans and Asset Based Finance. ScotPac was recently awarded The Adviser Magazine’s Debtor Finance Loan of the Year for a seventh time.
For more information contact:
Todd Hayward – Mob: 0412 205 151
