Pitcher Partners has released its second annual Business Radar (PPBR) report canvassing the trends, challenges and opportunities faced by middle-market businesses across Australia.
- Australia’s middle-market businesses contribute revenue of $645 billion
- They typically employ from 20 – 200 employees
- Contribute 25% of national total revenue
One of the key findings in the first edition of the 2020 Business Radar report was that global geopolitical and macroeconomic events did not impact confidence levels amongst middle-market business owners and leaders. While some of these events eventually filtered down to affect the middle market, it was not a significant consideration for many businesses.
Arguably, the events of the last year have changed this. The COVID-19 pandemic has impacted businesses across many sectors. It has also reinforced the importance of understanding what is going on beyond their immediate organisation or industry.
When the research for this second edition of the report was gathered, Australia was moving on from the height of the first wave of the COVID-19 pandemic. The economy was recovering quickly, and business and consumer confidence had reached all-time highs, despite the nation’s continued vulnerability through exposure to global events and intermittent domestic lockdowns in most states.
Strong self-belief and confidence in the future are two of the many factors influencing the confidence of middle-market business owners and leaders. The strength of Australia’s economy in 2021 has buoyed business confidence. However, business owners and leaders can still be better prepared to ensure they are opportunity ready and in a position to capitalise on market changes.
The second PPBR report outlines how the COVID-19 pandemic has impacted Australia’s middle market and key factors to consider across the following themes:
Riding the COVID-19 wave
One of the biggest challenges that arose in 2020 was the realisation of how reliant businesses and countries are on only having one export market or concentrating a large part of their supply chain in one destination.
Businesses didn’t let the crisis go to waste
The research, which measured the same areas of confidence covered in the report’s first edition, revealed that confidence has increased across most areas. Confidence levels grew in current business strength, the future success of the business, industry, and the Australian economy. Confidence levels in the global economy declined slightly.
Strategic planning and business confidence
Middle-market businesses with low confidence in their current strength are twice as likely to make ad hoc decisions as businesses with high confidence (33.9% v. 15.9%). In contrast, confident businesses have formal mid to long-term strategic plans and have a strategic approach to decision making.
Consistent with the first PPBR report, staff retention has been a challenge for half of the businesses surveyed, with remuneration perceived to be the largest contributor to staff turnover (34.5%). Staff attraction and retention are the most common challenges for businesses with 200+ employees.
It’s all relative
Confidence in the current strength and future success of family businesses has increased significantly since the first report (7.64 v. 7.24 & 7.70 v. 7.16, respectively, on a 10-point scale).
Middle-market businesses continue to have a bullish outlook on the future and the domestic economy, demonstrating the capacity for these business owners and leaders to weather any storm.
Learn more about the report from Pitcher Partners Private Business and Family Advisory experts across the country.