New reports show positive signs as 2020 ends
On a national and local front, there are strong signs of economic and business recovery as we head towards the end of a challenging year.
Two publications released over the past month report very positive signs of recovery for our small business sector in WA.
On a national level, the Small Business Counts report was released by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) on 14 December. This report uses data to track how small businesses in Australia have weathered the storms of 2020. Insights include:
- More than 87 per cent of all innovating businesses in Australia are classified as small - with innovation helping them outperform their counterparts in every measure including employment, profitability and productivity.
- 40 per cent of businesses made changes to their operations in response to the challenges of the year (and 20 per cent will keep those changes in place).
- The small business sector is Australia’s biggest employer, employing 41 per cent of the business workforce and more than 60 per cent of the country’s apprentices and trainees - more than any other sector.
- The vast majority (92 per cent) of small business owners in Australia are aged 30 years or over, reflecting a depth of skills and experience among SMEs.
The findings echo what we have seen in WA, where small businesses have shown incredible resilience throughout the year.
The most recent quarterly economic commentary from Bankwest Curtin Economic Centre (BCEC), released in November 2020, also reports strong signs of recovery in the WA economy following the initial impact of COVID-19. Most notable are early findings from BCEC’s Small Business Survey 2020, incorporated into the report:
- nearly half of small business owners had used the JobKeeper wage subsidy, or intend to do so, with 40 per cent naming this as one of the most important assistance measures during COVID-19 - particularly those in accommodation, food, real estate and construction
- across all WA businesses, 93 per cent of jobs lost since March 2020, have now been recovered
- more than a quarter of small businesses expect to employ additional workers in the next six months. This rises to more than a third of business in construction, and nearly a third of those in retail.
The BCEC report on the Small Business Survey 2020 will be released early next year, and I look forward to seeing all the insights. In addition to this information, the Australian Bureau of Statistics has also released payroll jobs data for November 2020 showing that the number of jobs in WA now exceed pre-COVID levels. We are the only state in the nation to show an increase following the pandemic, with the national average of jobs 2 per cent lower than pre COVID-19 levels.
Work still to do
In addition to these positive signs, both the ASBFEO and BCEC reports draw attention to areas that are a cause for concern in our small business sector.
- Cash flow management and late payments are still a major source of concern for small businesses across the country:
- In WA, the percentage of payments delayed over 30 days or more increased to nearly 30 per cent, according to BCEC Small Business Survey respondents. In fact, only 42 per cent of payments from large to small businesses in WA were made on time.
- ASBFEO reported more than a doubling of timeframes for late payments from October 2019 to October 2020, from 13.4 days a year ago to 30.6 days late in October 2020.
- Nearly half of WA’s small business owners responding to the BCEC Small Business Survey reported mental or physical health problems, attributed to the stress of running a business.
- The commentary reports that WA small business owners feel the most stress from the multiple responsibilities they have, including: red tape and compliance, financial stress and cash flow, and not being able to take a day off when they are unwell.
- Business owners locally and nationally are nervous about the end of existing government support measures, such as JobKeeper, early next year.
While arguably Western Australians find ourselves in the best possible position as we emerge from the disruption of 2020, it’s crucial to remember that behind all these statistics are individual business owners, striving hard every day.
We still have important work to do in changing behaviours around payment times, particularly from larger to smaller businesses, and giving business owners access to the skills and resources required to operate a successful enterprise.
As a society, addressing mental wellbeing continues be a major focus and we need to ensure that those small business owners facing challenges have someone to talk to, ways to address their stress, and can access help when they need it.
Our team at the SBDC is focussed on providing practical, accessible support to give WA business owners somewhere they can always turn to. Many of us won’t be sorry to see the end of 2020. But overall, we head into the new year with a sense of optimism, buoyed by a state economy that is showing better than anticipated growth in both employment and revenue, and a renewed business and consumer confidence.
I wish you all the best for the rest of the year, a festive season spending quality time with family and friends, and hope that 2021 delivers many opportunities.
WA Small Business Commissioner