Cash rate hindering business investment, MYOB says

Business management solutions provider MYOB has released new research showing that Australian mid-sized businesses are increasingly investing in artificial intelligence (AI) to strengthen operations and offset ongoing economic and international headwinds.

According to the provider’s findings, more than one-third (35 per cent) of the more than 500 mid-sized businesses (with 20–500 full-time employees) surveyed said that using AI has already reduced their reliance on engaging external marketing services, while one in three (33 per cent) report more efficient administration and data management, and over a quarter (28 per cent) are using AI to upskill their existing teams.

AI is also being used to plug resourcing gaps, with 30 per cent of businesses adopting AI tools to supplement their workforce – which may be alleviating the impact of hiring freezes, which 30 per cent of those surveyed said have had to be put in place amid market conditions.

Speaking about the findings, MYOB chief executive Paul Robson (pictured) said that the findings indicate the sector is backing technology to balance interest rate pressure, rising costs, and global trade constraints while setting up for long-term success.

“More than half of the mid-sized firms surveyed believe the Australian economy will improve over the next 12 months and AI will be a valuable lever to lift productivity, contain costs, and create operational efficiencies,” he said.

“AI’s ability to lower cost pressures through automation and smarter resource allocation will allow mid-sized businesses to remain agile and resilient while enabling their teams to focus on growth.”

Robson continued: “This increased investment could be a reflection of growing confidence, with 60 per cent expecting revenue to rise in the coming 12 months.”

This all said, the findings show that the cash rate has been considered the biggest challenge to operations in the past year.

“Despite 52 per cent of mid-sized businesses seeing increased revenue this year, the cash rate may have caused some to delay expansion plans or hold off on hiring,” Robson noted.

“A quarter of mid-sized businesses believe the cash rate would need to fall by at least 1 percentage point to facilitate greater growth.”

Furthermore, half (49 per cent) of Australia’s medium-sized organisations reported that recent US tariffs have also had a negative impact on their operations. To combat this, businesses are taking proactive steps to reduce risk including locking in supply contract costs and building up cash reserves to cushion against increased costs or potential disruptions.

Notwithstanding these challenges, Robson said the mid-sized business segment continues to demonstrate resilience.

“Mid-sized companies in Australia have been strong in a challenging year and while they are still facing some cost pressures, there’s clear optimism about what 2026 holds,” he said.

“It’s clear from the data that businesses are putting strategies in place to manage risks while preparing to maximise opportunities.”

Moving forward, MYOB’s findings showed that over one in two mid-sized businesses intend to mobilise AI to improve customer relationship management in the coming year, while a further 47 per cent will adopt AI tools to optimise supply chain management. Other areas targeted for automation include customer service, payroll management, and financial reporting.

Many mid-sized firms, the provider said in a statement, “are turning to technology more broadly to boost productivity and gain a competitive advantage”. The top areas flagged for digital investment by respondents over the next 12 months include: customer relationship management, finance and accounting management software, enterprise resource planning, payroll, and workforce management systems.