New report highlights sharp contrast in SME confidence across industries and states
Australia’s small and medium-sized enterprises (SMEs) are showing a stark divide in revenue expectations, according to the latest ScotPac SME Growth Index, with forecasts ranging from an 18% increase to a 30% fall over the next six months.
The 48-percentage-point spread between the most optimistic and most pessimistic projections is the largest since ScotPac began tracking SME sentiment 11 years ago. The data underscores growing disparity in confidence levels across industries and states.
Nationally, 59% of surveyed SMEs anticipate revenue growth, approaching the record high of 62.6% recorded in 2014. Still, a third of businesses expect income to decline in the coming half-year.
The ScotPac report showed an average expected revenue rise of just 1.4% across all respondents. Queensland SMEs led the country with a 10% average forecast, followed by Western Australia at 7%. In contrast, Victorian SMEs projected a 9% decline, making it the only state with a negative outlook.
Resource-linked firms were the most confident, forecasting average growth of 6.3%, while construction companies were the least optimistic, expecting an average drop of 8.3%.
Despite mixed outcomes, ScotPac’s group executive for client acquisition, Craig Michie (pictured above), said the general trend towards growth is encouraging.
“Considering the cost challenges SMEs faced in 2024, it’s great news that average revenue forecasts remain in the black,” he said. “The surge in optimism from businesses in resource-rich states shows no signs of slowing, while SMEs with tight margins or high exposure to discretionary spending are understandably more cautious about the future.”
Michie also highlighted policy and economic factors weighing on sentiment. “There are more challenges on the horizon for business owners with the super guarantee set to rise again in July and the ongoing uncertainty around tariff policies,” he said.
“However, with inflation and interest rates expected to ease in coming months, there are good prospects of SME confidence lifting across more states and sectors.”
Michie urged SME operators to engage regularly with finance professionals to manage ongoing risks and opportunities. “Whether it’s managing payroll, paying down debt, or gearing up for growth, a range of finance options are available to help SMEs in almost any situation,” he said.
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