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State and Territory breakdown: where SMBs stand with lockdown impacts

The ongoing impact of Vic lockdown sends a warning for NSW

The SME Growth Index is Australia’s longest-running in-depth research on small business growth prospects.

Conducted by East & Partners, the September 2021 round polled a representative sample of 1255 small business leaders across the nation.

The research indicates the impact of 2020’s long lockdown in Victoria is still being felt in the SME sector. Fewer than two in 10 Victorian businesses are forecasting positive growth, with six in 10 forecasting revenue decline and a quarter expecting to remain static.

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NSW, usually very bullish about growth prospects, was already tentative in the early days of its Delta outbreak. Four in 10 SMEs were forecasting revenue growth, just over a quarter thought revenue would decline and around one third said revenue would hold steady.

Queensland is the state with the fewest small businesses (only 2.2%) forecasting revenue decline. About a quarter are holding steady. A buoyant seven in 10 (73.8%) are forecasting growth. These results point to just a few industries (such as tourism) being hardest hit: of the two in 100 Queensland businesses forecasting revenue decline they are expecting the largest decline of any of the states (-6.1%).

Western Australia, South Australia and the Northern Territory were the most positive about finishing 2021 with strong revenue. In each of these states and territories, more than eight in 10 businesses are forecasting growth and fewer than one in 10 expect revenue decline.

Warning signs mean restructuring and M&A boon will continue

Mr Sutton said the SME Growth Index recorded the highest ever proportion of SMEs forecasting revenue will decline (26.1%), with the widest ever revenue range (from +9.6% growth to -15% decline).

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“We also recorded the equal lowest ever proportion of SMEs reporting no change in revenue (23.7%), suggesting businesses are being forced off the fence and either scaling up for growth or bracing for troubled trading conditions,” he said.

Each round, business respondents are asked to identify their business phase as either start-up, growth, stable, consolidating or contracting (declining).

Almost two-thirds of SMEs identify as being in a positive business phase – they are either in growth phase (35.1%) or stable (29.5%). A further 10.8% identify as start-ups.

An increasing proportion of businesses identify as struggling. A record high (15.7%) are in outright decline – this percentage has almost doubled since research began in 2014.

“Our past three research rounds have seen consecutive results with the highest number of contracting SMEs as at any time since 2014,” Mr Sutton said.

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“Given the optimistic growth prospects of half the sector, combined with the warning signs for the troubled end of the SME sector, the next 12 months are likely to see strong restructuring and M&A activity.

“This is yet another reason for small business owners to ensure they are getting professional advice to guide their enterprises and the right funding to fuel their business activities and allow them to survive and thrive.”



ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion revenues. For more than 30 years ScotPac has helped thousands of business owners succeed, by unlocking the value from their business assets. Whether it is purchasing stock, investing in vehicles and equipment, improving cash flow or accessing additional working capital, ScotPac can help.

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SME Growth Index is Australia’s longest-running in-depth research on small business growth prospects. Twice a year since 2014 market analysts East & Partners conduct this independent research on behalf of ScotPac. For the September 2021 research round, a representative national sample of 1255 $1-20m revenue businesses were surveyed and interviewed.


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