A third of SMEs set sights on growth for 2024
Short-term projections for SMEs are looking more positive overall, with around one-third anticipating revenue growth in January, according to a recent Fifth Quadrant survey.
The Fifth Quadrant Business Sentiment Index for December has revealed that profitability among businesses remains relatively stable, with half of surveyed SMEs reporting profits and only 20 per cent reporting a loss.
The survey report also indicated that short-term revenue projections remain relatively positive, with one-third anticipating revenue increases in January.
“Thirty-seven per cent of SMEs are setting their sights on growth in 2024, with a decrease in the number of businesses (13 per cent) planning to downsize or exit,” the report said.
“Additionally, 18 per cent of businesses project an increase in their workforce in the next quarter, with a third foreseeing higher wages.”
The index remained steady at 100 for December, which is consistent with the long-term term average of the index.
It also showed that demand for finance also spiked in December, with 20 per cent of businesses indicating a need for additional funds to kickstart operations in 2024.
Confidence in the ability to make loan payments has increased but loan stress remains a concern, particularly in the retail sector.
The report found that while 28 per cent of SMEs experienced an increase in monthly revenue compared to the same period last year, over one-third continue to witness declining revenues.
“The most impacted sectors include hospitality, distribution, construction, and retail, underscoring the difficulties these sectors face adapting to the current market environment,” said the market research company.
SMEs continue to voice major concerns over rising input costs, indicating expectations of continued inflationary pressures into 2024.
“The overall economic outlook among SMEs remains cautious, with prevailing pessimism regarding global and Australian conditions,” said Fifth Quadrant.
“Nevertheless, a noticeable upturn in confidence was observed in December, underpinning a level of positivity for the coming year.”
Fifth Quadrant managing director James Organ said that heading into 2024, the sentiment among SMEs appears cautiously optimistic despite challenging market conditions.
“While revenue fluctuations persist, businesses continue to demonstrate resilience and effective cost management,” said Mr Organ.
“Concerns over rising input costs and inflationary pressures remain, yet there's a growing confidence in revenue growth and workforce expansion. In summary, many SMEs will be hoping for a brighter 2024, after another year of significant challenges.”
About the author
