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Top concerns for SMEs right now? Cashflow and availability of capital

New survey data from the NSW Small Business Commission shows business confidence is yet to fully recover from the Omicron outbreak.

The survey suggests that while concerns related to the impact of COVID-19 and associated restrictions has fallen, other factors such as severe weather events, fuel prices, supply chain issues, labour shortages, potential interest rate rises and global events may be weighing on confidence.

ABF media

Individual business confidence rose marginally to 41 per cent in March, up 2 percentage points from February (39 per cent) and confidence in the NSW economy also increased marginally to 32 per cent in March, up 2 percentage points from February (30 per cent). Although business confidence levels are currently subdued, they are trending in the right direction and remain above levels seen in August 2021 and April 2020 when NSW was in lockdown.

Cashflow and the availability of working capital remains the top concern for small businesses in March, with additional concerns about labour shortages and the time required to pay down accumulated debt.

  • 57 per cent of business operators expressed that cashflow and the availability of working capital is a concern for their business in the current operating environment.
  • 26 per cent of business operators reported that attracting and/or retaining appropriately skilled staff is a challenge currently negatively affecting their business.
  • 24 per cent of business operators reported that they are carrying more debt relative to the start of the pandemic. Of those businesses carrying more debt, 34 per cent expect it will take 1 to 2 years to return to debt levels they had before the pandemic and 41 per cent expect it will take more than two years.

The survey also asked respondents about the state-wide impact of recent storms and flooding. Small businesses reported direct and indirect impacts of a greater magnitude than the March 2021 floods.

  • 12 per cent reported being directly impacted compared to 5 per cent in 2021
  • 33 per cent reported being indirectly impacted compared to 17 per cent in 2021
  • Reported damages and losses are around a third higher compared to 2021.

The online survey was completed between 8 and 17 March, with 2,420 small and medium sized businesses across NSW responding.

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