Manufacturers and those in the construction industry intend to invest more than others in innovation in 2025.
Manufacturers and those in the construction industry intend to invest more than others in innovation in 2025.
Despite lingering uncertainties around inflation and the global landscape, particularly tariffs in the United States, small-to-medium enterprises (SMEs) expect more work to start the year than normal, according to a new MYOB survey.
The survey of over 500 SME owners and decision-makers showed 30% have more work lined upfor the January-to-March quarter than they would usually expect.
Just over a quarter (27%) said the opposite and expected to have less work lined up for the quarter, while 41% expected the same level as normal.
The results were an improvement on the end of 2024 when 18% said fourth-quarter sales exceeded their expectations.
Late last year, 43% of SMEs reported lower-than-expected sales.
MYOB chief customer officer Dean Chadwick said the new survey numbers were an encouraging start to the year.
“Inflation and the cost of living continue to influence SME confidence coming into 2025, as well as factors like transport costs, the country’s economic performance, and interest rates.
"While it’s certainly still early days, it’s heartening to see local SMEs are beginning the year with more momentum than many will have seen in some time."
The momentum is also positive for larger businesses, as 57% of firms with 50-99 employees are reporting more work lined up for the first quarter than expected, after 33% reported higher-than-forecast sales for the final quarter of last year.
MYOB chief customer officer Dean Chadwick said many SMEs are adapting their sales strategies.
Fuelling growth
Nearly a quarter (24%) of SMEs plan to increase spending on business improvements this year but 21% were planning to cut additional costs.
Half of the businesses surveyed by MYOB intended to keep their investment the same as in previous years.
The investment by SMEs was targeted towards five key areas, with 33% dedicated to marketing and sales, and 28% dedicated to technology and digital transformation.
Other areas of importance for SMEs are equipment and machinery upgrades (25%), team training and development (24%) and improving the customer experience (19%).
“As local business owners look to stimulate growth this year, it’s all about the customer — driving foot traffic and attracting new custom by homing in on their marketing and sales activities,” Chadwick said.
“Then, it’s about doing what they can with their teams to keep these customers returning and improving the customer experience.”
Breaking down that intended investment, the median estimated spend on innovation by SMEs for 2025 was just over $33,000.
That number rose significantly for those in the manufacturing, and construction and trades industries, with the estimated median investment for 2025 reaching $74,000 and $63,330 respectively.
Chadwick said business operators were still carefully balancing lower demand volumes and higher costs.
“It’s a delicate trade-off between managing those challenges and exploring innovation as a way to help boost their business performance.
“If business owners bed down their investment plans now, they will be better positioned to start realising their ambitions – whether that is business expansion, revenue growth or upskilling their teams – when they enter the new financial year,” he said.
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
