SME revenue gap shows ‘record divide’: ScotPac

ScotPac’s SME Growth Index Round 22 has unveiled a “record divide” in the six-month revenue growth forecasts for Australian SMEs, stretching to 48 percentage points.

The gap between the most positive and negative SMEs was measured to be the largest it had been over the 11-year history of the Index.

According to ScotPac, the gap grew from +18 per cent to -30 per cent and exposed the sharp contrast in SME confidence across borders and business sectors.

Results showed that overall, 59 per cent of SMEs expected to see half-year revenue growth, which was nearing the record high of 62.6 per cent achieved in 2014.

However, it was noted that this was “tempered” by one-third of small businesses across Australia who expected revenue to fall.

The average projected revenue growth rate across all SMEs nationally was measured at 1.4 per cent, with the most positive business flagging 18 per cent revenue growth and the most pessimistic predicting a 30 per cent decline.

Queensland remained the state with top SME confidence and reported an average revenue growth forecast at 10 per cent, which was followed by Western Australia with an average growth forecast of seven per cent.

Victoria was noted to be the only state with negative revenue expectations, with SMEs having projected an average decline of nine per cent.

Craig Michie, ScotPac group executive of client acquisition, said despite the “patchy” national results, it was encouraging that most small businesses had projected a bump in short-term revenue.

““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 noted that there were still challenges on the horizon for business owners as super guarantees were set to rise in July and ongoing uncertainty around tariff policies.

However, as inflation and interest rates were expected to begin to notably ease, there were solid prospects of SME confidence lifting across the states and sectors.

Michie recommended SME owners and operators at all stages of the growth cycle to regularly consult with their brokers and advisors on how to best optimise their cash flow.

“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.

“For over 35 years, ScotPac has worked with brokers to help thousands of SMEs manage their cash flow and access the funds they need. In a rapidly evolving market, our expert team of lenders look forward to providing more businesses with the right support.”