The majority of small- to medium-sized enterprises expect revenue to rise over the next six months, according to ScotPac.
Nearly six in 10 SMEs (59 per cent) expect their revenue to rise in the six months to March 2026, ScotPac research has found.
The non-bank lender’s biannual SME Growth Index Report for September surveyed 724 SMEs and found businesses are forecasting a record average increase of 10 per cent in revenues.
The most bullish SMEs project growth of 19 per cent.
Western Australia reclaimed its mantle as the most positive state, with 91 per cent of SMEs expecting revenue growth, followed by Queensland (84 per cent) and NSW (61 per cent).
However, optimism is not evenly shared. More than a third (35 per cent) of SMEs forecast revenue to fall by an average of 14 per cent, with Victoria the most downbeat state – 67 per cent of businesses in the south-eastern state expecting revenue declines. Construction firms also remained the most pessimistic, with only 26 per cent anticipating growth.
A record one in four SMEs (25 per cent) said they were in outright contraction mode – triple the proportion seen in the survey’s first year in 2014. The most pessimistic businesses forecast revenue declines of 30 per cent, highlighting the pressure weighing on certain sectors.
ScotPac noted that the short-term outlook among SMEs is becoming more polarised.
Indeed, the gap between the most optimistic and pessimistic SMEs for revenue forecasts totalled 49 points – the widest divide in the 11-year history of the report, underscoring deep uncertainty in the business landscape.
ScotPac CEO Jon Sutton said the growth outlook for SMEs has never been more divided across borders and business sectors.
“Once again, SMEs are displaying their outright resilience with nearly 60 per cent expecting growth despite rising cost challenges across our economy,” Sutton said.
“For those with a growth mindset, agility is key – being ready to seize opportunities by accessing scalable finance when needed.”
However, he noted that “the alarm bells at the other end of the spectrum are deafening”, with one in four SMEs now describing themselves as being “in outright contraction”.
“This divergence highlights that business conditions are no longer uniform, and SMEs at every stage of the growth cycle should be leaning on their brokers and advisers to help them navigate what comes next,” Sutton said.
Recent research from Lumi found that a growing number of SMEs are turning to brokers for assistance with growth and cash flow issues. According to the research, many SMEs plan to raise finance in the next year and are using brokers to access a wider range of funding options or for working capital.
Non-bank lender Banjo Loans, which specialises in finance to SMEs, this week urged mortgage and finance brokers to engage with their commercial clients ahead of Australia’s busiest retail quarter.
[Related: More SMEs using brokers to secure finance]
