Small business has long been the engine room of Australia’s economy, employing around 4.7 million people before COVID-19. But when the pandemic struck, many of these businesses were particularly vulnerable to the economic downturn, so government policies including JobKeeper were vital to them staying afloat.
Business confidence has improved since the COVID-19 pandemic shutdown Australia in the beginning of the year. With 34% of small to medium businesses very confident in running their business. However, 18% of businesses are extremely unconfident about running their business.
Business confidence is returning, but most small businesses still say it will take at least a year to fully recover from the pandemic. Regional businesses are slightly more confident in their outlook for recovery compared to metropolitan businesses.
The impact of COVID-19 on SMEs has been felt unequally across location and industry. Businesses in rural and remote areas were much less likely to have had their profitability affected by COVID-19 than were their peers in capital and major regional cities.
On the flip side a much higher proportion of city-based businesses have changed their practices and innovated in response to the recent disruptions. The most common changes include introducing more flexible ways of working and faster adoption of online services or e-commerce. SMEs in finance and insurance, manufacturing, and property were most likely to make these changes.