Q: How are small to medium-sized enterprises (SMEs) faring in Australia today?

Australian businesses are continuing to show resilience in our economy. While different sectors and locations are moving at different paces, NAB expects the economy to grow more quickly in the second half of the calendar year.

In NAB’s recent SME Business Insights Survey, it was encouraging to see nearly 60% of Australian businesses planning to invest over the next 12 months, with Finance & Insurance (76%), Property Services (67%) and Business Services (76%) sectors leading the charge[1].

Q: What is the primary area of focus for businesses? Where do they want to invest the most?

Despite a challenging economic environment, SMEs are continuing to find ways to thrive by investing in what matters most to their business – their people.

Hiring, retaining and developing new staff is an ongoing challenge for business owners as many grapple with labour and skill shortages across their industries.

Businesses are looking for innovative solutions to hire, retain, engage, and invest in their teams.

Regionally, investment intentions in staffing are particularly strong in South Australia (72%), while by industry, Business Services (74%), Construction (73%) and Healthcare (70%) are standouts when it comes to putting the right team together.

Q: What should we know about equipment finance? Are there specific industries where brokers can support their business customers?

NAB’s research shows national demand for new hardware and equipment, with 1 in 5 businesses looking to invest in new equipment. In fact, purchasing new equipment was a much bigger priority in Accommodation & Hospitality (47%) and for Queensland businesses (31%). Health Services (35%) came out on top for investing in additional or larger premises.

Brokers can guide their customers with equipment and asset finance purchases by being proactive and ensuring a clear line of communication on a regular basis. Our team at NAB can assist both brokers and customers for equipment finance through our breadth of experience and understanding across numerous industries, with access to fresh data and economic insights from NAB’s dedicated Group Economics team. We provide a timely service proposition as equipment finance is a highly portable product and very competitive.

Q: What other investment areas are businesses exploring?

Many businesses are actively exploring geographical expansion, with nearly 29% planning to invest in new markets across Australia. This trend is particularly prominent in Tasmania, where 80% of businesses are looking to expand their geographical reach.

In addition to expansion, companies are zeroing in on innovation and improving productivity with 32% of SMEs looking to invest in new technologies or systems.

Q: How can brokers support their SME customers with their investment goals?

The key for brokers is to deeply understand SME customers and their businesses. By grasping the context in which these businesses operate, brokers can build stronger relationships and offer more tailored solutions.

The next 12 months present an excellent opportunity for brokers to lay the groundwork for longer-term relationships by helping business customers ride out the current market cycle and set themselves up for future success.

Brokers can explore NAB’s data and insights further below.

[1] NAB SME Business Insights – Investing to Grow & Business Advice (Q2 2024) SME – Investing to Grow & Business Advice (Q2 2024)

Article published in The Adviser Digital Magazine in November 2024.