Small business survey finds surprising optimism

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Many small businesses surveyed are confident about the future, but survey organisers say those who were struggling may not be well represented in their findings
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Small and medium sized businesses are cautiously optimistic about their future despite the tough economic conditions.

The report by human resources platform MyHR showed nearly two-thirds of small and medium sized enterprises (SME) surveyed expected business revenue to improve in the next year.

Nearly half felt business conditions would improve, while 38 percent thought they would stay the same.

It also found 60 percent expected to raise salaries in the next six months.

The report was put together using data from more than 1200 businesses with more than 29,000 employees, and with insights from more than 400 business owners and managers who were surveyed.

MyHR chief executive Jason Ennor said the data painted a “cautiously optimistic picture” of the SME landscape.

“I think coming out of the challenges post-Covid, 2022 was reasonably settled,” he said.

“And then the weather events of early 2023 really knocked the back end of the financial year.”

The report covered the 2023 financial year ended March.

Ennor said it was surprising to see expectations for revenue to grow, given the difficult trading conditions.

He believed it was a tale of two groups.

“I think those that have really suffered with the drop in demand, the increase in pricing – particularly the increase in interest rates. Those businesses, unfortunately many of them have already gone to the wall,” Ennor said.

“What we’re seeing is there were businesses that borrowed through Covid to survive those lean years, and they borrowed personally. This is the small business sector we’re talking about.”

As interest rates rose, those with outstanding debt faced “real problems” and businesses were winding up as a result, Ennor said.

On the other hand, most of the businesses that took part in the survey were ones that survived and were looking forward to a “positive future”, he said.

Ennor said the feeling was that conditions had “bottomed out”, despite a recent spike in restructuring activity.

“The restructure activity throughout the year [ended March] has been on par with the previous year,” he said.

“In April, May and June, however, we have seen a marked increase.”

Ennor believed that was due to recent weather events, and expected restructuring activity to slow and level out.