Edition 19 of ScotPac’s SME Growth Index report (October 2023) was released a few weeks ago and we’ve put together a list of insights that the Boost Business Loans team found most interesting.
61% of SMEs are planning to invest in their business in the next six months
Almost two thirds of Australian SMEs plan to invest in their business in the next six months, a substantial 15% increase year-on-year. It is the highest level of investment intent for SMEs in four years and represents a major rebound in confidence from the 52% recorded in September 2020.
In terms of funding new investment, nine out of 10 SMEs said they would consider using their own funds, while the appetite for non-bank lenders remained at a record high 47% – up 50% since March 2022.
SME growth forecasts hit seven-year highs in fluctuating market
57% of SMEs forecasting positive revenue growth in the next six months by a record average of 8%.
SMEs in Western Australia and Queensland – two states with large exposure to our booming resources sector – were the most optimistic in the nation with revenue growth forecasts of 92% and 84% respectively.
For the third straight SME Growth Index report, the spread of positive / negative revenue projections grew to its largest ever margin, stretching from +13% to -22%.
Most SMEs yet to benefit from Artificial Intelligence (AI) productivity gains
Less than one in seven Australian SMEs have either implemented Artificial Intelligence (AI) technology or will soon do so, a figure dwarfed by 85% of respondents with no plans to use AI in their near future.
4% of SMEs said they felt AI was either a competitive threat or a cybersecurity risk.
While most SME owners remain sceptical of AI technology, its potential to increase productivity and reduce wages costs make it inevitable that more will soon focus on planning for AI adoption.
Aside from justified concerns about job displacement, data privacy and workflow changes, one of the largest upfront impediments for SMEs in implementing AI technology will be cost.
About the SME Growth Index report
The Round 19 research was conducted by East & Partners who interviewed 722 SME enterprises with annual revenues of A$1-20 million. SMEs surveyed have operated continuously for 14.6 years and manage an average of 57 full time employees.
Sectors represented in the survey included Manufacturing (14%), Property & Business Services (14%), Retail (11%), Wholesale (12%), Personal & Other Services (10%), Construction (10%) and other industries including Transport & Storage, Mining, Agriculture, Media, Hospitality, Finance & Insurance (non-bank) and Electricity.
There is a lot of great information in the report so download a copy of the SME Growth Index on the ScotPac Research page today.
