More than half (56%) of companies have experienced no revenue growth during the last 12 months, according to Servcorp Australian Business Growth Monitor.
The majority (67%) of Small to Medium Enterprises (SME’s) saw no change with headcount over the past year, blamed on the current competitive market, with businesses hesitant to hire new staff.
Servcorp today launched its second bi-annual Australian Business Growth Monitor – a study of 464 managers and business owners, mostly SMEs. The monitor moved just one point since July 2013 – from 98 to 99, suggesting the Australian economy is static.
Servcorp COO Marcus Moufarrige, says, “this report is a harsh reality check for all Australian businesses.
“As companies fight harder to win clients with smaller budgets, Australian businesses are essentially becoming stagnant even as they are trying to grow.”
Traditional industries such as manufacturing and mining are on the decline, while healthcare and professional services show the most promise.
Major barriers for growth include difficult economic and market conditions (36%) as well as a reduction in consumer spending and customer budgets (33%).
Businesses are also working harder to win new clients who have smaller budgets. The almost 50 per cent growth in client base is not translating into revenue growth, ServCorp warns.
Looking at how companies are planning to drive growth, technology was a key focus with 64 per cent of those questioned planning to invest in technology over the next 12 months – including an upgraded website (33%), social media (26%) and cloud services (16%).
“It’s a great sign that companies recognise the benefits of technology and are making this investment. In tough times, technology has a vital role to play not only in increasing efficiency but also innovation,” says Moufarrige.
Looking ahead, more than half (54%) of those surveyed believe that manufacturing – an industry traditionally seen as a cornerstone of Australia’s economic foundation – is now on the decline, followed by mining (34%) and agriculture (30%).
In contrast, the industries most expected to grow this year include healthcare (40%), professional services (36%) and construction (32%).
The report also shows a marked decline in satisfaction levels with the Abbott Government compared to prior to the Federal Election.
Almost half (45%) of those surveyed in July last believed they would be better off under a Coalition government, compared to only a quarter (23%) in today’s report who think that the Government’s commitment to small businesses has lived up to expectations since it came to office.