Business Radar 2021
Pitcher Partners Business Radar
As the engine room of Australia’s economy, the middle market produces just under 25% of Australia’s revenue ($645b) and one-fifth of the nation’s net tax revenue.
The middle market is rich with successful businesses that drive economic growth, deliver vital products and services, and provide employment to millions of Australians. To continue growing and achieving their goals, these businesses need to proactively deal with their unique challenges while the economic environment needs to encourage business investment.
While the COVID-19 pandemic has been challenging for businesses, confidence levels remained strong between the first edition of the report and this second edition. Driven by the impacts of the pandemic, there were also some shifts in the top priorities amongst Australia’s middle-market businesses, including a focus on technology and consumer preferences becoming a lower priority.
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.
Pitcher Partners latest Business Radar shows Australia’s middle-market is even more confident than pre-COVID-19. For many, COVID-19 was an opportunity to thrive, not just survive. The middle-market didn’t let the pandemic go to waste, taking the opportunity to pivot and make changes so they were better prepared to meet future challenges.
As expected, the most impactful global trend for businesses over the past year was the COVID-19 pandemic. 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 the supply chain in one destination.
In comparison to the first edition confidence has increased across several areas including current business strength, the future success of the business, industry, and the Australian economy. Confidence levels around the global economy declined slightly.
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 report’s first edition, 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.
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). Of those family businesses with no staff challenges, these businesses are most likely to make decisions without family bias (68.7%) and have no barriers to non-family members achieving executive positions (61.6%).