MYOB’s latest snapshot of the SME landscape revealed the industry is feeling optimistic about an improved 2024 economy but believe Christmas will be challenging.
The nationwide survey of over 500 SME owners and decision-makers has shown that 48 percent of participants believe the economy will improve in 2024.
This is a sharp increase from the latest MYOB snapshot in March 2023 where only 16 percent expected an improvement in the economy. However, Christmas is expected to be a challenge for SMEs.
In the last quarter, 45 percent of SME operators reported that their business performance and sales were below expectation for the past three months and many expect this to continue heading into the Christmas period.
“Relentless inflationary pressures have loomed large for most SMEs and despite expectations they could see an improvement in the economy in the next year, inflation, interest rates, and cashflow and profitability all remain key areas of concern as we go into the next six months,” says MYOB General Manager of SMEs, Emma Fawcett.
“Casting our focus to the more immediate term, and we can see local businesses are also bracing themselves for another trying festive period.”
The Christmas period is extremely important for one in 10 businesses who heavily rely on this part of the year.
But judging by past Christmases and the cost-of-living crisis being felt across the country, many SMEs expect a similar pattern to last year.
“While on the surface, the fact that most SMEs are expecting to match the revenue they achieved last Christmas may seem somewhat heartening, it’s important to keep in mind that this is off a low base given the continued declines over the last few years following the advent and aftermath of the pandemic,” Fawcett adds.
“However, we can see that local businesses are taking action to try to keep revenue steady over what is a vital trading period for many of them – applying changes in step with consumer spending behaviour, like running more sales and promotions.”
Heading into the new year, Fawcett says many SMEs need to keep the perfect balance between revenue flow whilst also covering rising costs.
In the past year, 46 percent of SMEs absorbed the impact of inflation by passing higher costs to consumers to protect their margins.
“As we head into the New Year, we will hopefully see inflation and the resulting cost pressures continue to trend down for the benefit of local businesses and consumers. Respite cannot come soon enough.”