Quarter of SMEs report higher sales in December

The latest wave of the SME Sentiment Tracker shows a strong December for SMEs, with 24 per cent reporting a higher turnover than prior to the pandemic and expectations regarding short-term revenues also staying in positive territory despite the anticipated January dip following the Christmas period.

However, expectations about economic conditions domestically and internationally remain weak, despite negative sentiment having peaked in October.

According to the tracker, a high proportion of SMEs continue to be concerned about inflation and rising interest rates (84 per cent) as well as increasing energy costs (81 per cent), which has resulted in growth expectations for the next 12 months continuing to fluctuate.

Employment figures remained reasonably consistent in December, with 28 per cent of SMEs actively recruiting, compared to 24 per cent in October. While recruitment appears to be getting slightly easier, SMEs continue to be concerned about wage costs (60 per cent) and skills shortages (56 per cent).

Capital investment also remains positive, with 25 per cent increasing their spend over the next three months, compared to 18 per cent in September.

Additionally, intentions to invest in commercial real estate and technology increased in December. 

In summary, SMEs closed out 2022 with reasonably strong revenue and employment data. Despite concerns regarding economic conditions, inflation and energy costs, the data suggests SMEs are becoming slightly more optimistic as we enter 2023.