As the Australian economy recovers from the COVID-19 induced recession, so does the majority of the small business sales market. Most business brokers are reporting increased sales activity in the past 3-6 months. However, the uneven recovery in the economy, as well as other lingering impacts of the pandemic, have led to some business sectors suffering lower demand. There is only partial clarity as to the short and long term impacts of the pandemic at this point in time, meaning that there is less certainty in predicting market activity going forward.
Key figures indicating the economic recovery in Australia are as follows:
• The unemployment rate has fallen from a peak of around 7.5% in mid-2020 to now being in the order of 5.5%.
• Current RBA projections have the unemployment rate to fall to around 5% by the end of 2021 and then further down to 4.5% by mid-2023.
• The current inflation rate of 1.1% is forecast to increase to around 2% by mid-2023.
• Wages are forecast to grow by around 2.25% by mid-2023.
• Consumer confidence gained from a recovering economy and increasing residential property prices, together with higher employment levels and wages, has led to higher household consumption.
• GDP growth for 2021 is estimated at a strong 4.75% as the economy recovers from COVID-19. It is also forecast for growth to be sustained at around 3.5% over 2022.