Grim outlook for SMEs

WITH Australia on the precipice of a possible recession, new figures from Small Business Loans Australia paint a concerning forecast for the future of industries reliant on SMEs for success, such as the travel sector.

The newly commissioned report surveyed 253 Australian small-tomedium business owners, finding one in three believe they would not survive a recession that lasted longer than six months.

Close to 15% of SMEs indicated they would not withstand a recession of any length, while 40% said they could operate in a recession for about two years.

Travel businesses in Western Australia appear to be most at risk, the state which held to an isolation stance on travel for the longest period of time, with a whopping 40% suggesting they could not handle any recession.

Anxiety among WA SMEs was far above any other state and territory, with South Australia the next most prone state (17%), ahead of Victoria (13%), followed by NSW & Qld (both on 11%).

“While Western Australia was least impacted by extended lockdowns over the course of the pandemic, border closures and high COVID cases prevented the numbers of domestic and international tourists that the state’s businesses would normally cater to, and spending among the general population would have likely reduced considerably,” the report noted.

Close to half of all micro businesses (1-10 employees) said they could last between 18-24 months of recession, while 15% said they would fall over if any type of recession hit.

Slightly larger businesses (1150) would fare marginally better, with only 11% of businesses stating a recession would spell the end of trading.