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As economic conditions become more challenging, six out of 10 small and medium-sized business enterprises (SMEs) plan to invest in their businesses over the next 12 months, according to new insights from NAB’s latest SME Business Insights for 2Q24.
The survey drew responses from around 700 Australian SMEs to analyse their growth plans for the next year, how they planned on doing so, and who they used for business advice.
The top investment priorities for SMEs include hiring people, developing new products, and adopting new technology.
Small and medium-sized businesses in Queensland, Victoria, and Tasmania are particularly inclined to invest in growth in the coming year.
NAB’s executive for small business Krissie Jones highlighted Australia’s dual-speed economy, saying that while some businesses are focused on growth through strategic investments, others are managing the impact of higher costs and constrained consumer spending.
“What has struck me as I’ve been travelling around Australia is the resilience of small-business owners – they are adapting, with many looking to invest and preparing for growth,” Jones said.
“Many remain eager to explore growth opportunities that are right for them, while still being thoughtful around where and how they spend their money in the near term.”
The research revealed that SMEs in the finance and insurance sectors are the most likely to invest, with three in four planning to do so.
This is followed by SMEs in property and business services, with two in three expressing intents to invest.
In contrast, retail and construction sectors showed the lowest levels of investment intent, reflecting the greater challenges these industries have faced over the past year.
Small-business owners in Queensland are particularly inclined to invest in new equipment, with around one in three planning to do so.
This trend is especially prominent in the hospitality sector, where nearly one in two businesses are investing in new equipment.
“With higher interest rates and stubborn inflation, what we’re seeing is SMEs making smart investments in goods that help reduce their operating costs – important in the current environment,” Jones said.
“We’ve continued to see strong growth in business finance for new equipment, with NAB’s equipment finance to small businesses up 11 per cent on the June quarter.
“Some of the top things being financed include utes, vans, trailers, and machinery. As Australia’s largest business bank, our focus remains on supporting all our customers – those ready to grow or needing extra help.”
[RELATED: Aussie SMEs have ‘gone into hibernation’]
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