Australian SMEs show rising confidence & digital adoption in 2026

Small and medium-sized enterprises across Australia are showing early signs of recovery as they head into 2026, according to new survey data. Despite ongoing economic volatility and rising costs, notably continued increases in utility prices, many SMEs are reporting stronger revenue trends and a gradual rise in confidence for the year ahead.

Revenue trends

MYOB's latest Bi-Annual Business Monitor, which surveyed 1,087 Australian SMEs, revealed that 19% of businesses have seen an increase in revenue-a four-point rise compared to six months earlier. Of those reporting higher revenue, one in three attributed gains to greater consumer demand. Expectations for further revenue growth have also improved, with 26% of respondents anticipating revenue will climb in the next year, up from 24% in the previous survey period.

Start-ups stand out as notable contributors to this recovery. Among early-stage businesses, more than a third reported higher revenue, almost three times the rate of more established counterparts. Half of start-ups expect their revenue to increase further over the next 12 months.

"More than a third of start-ups reported higher revenue, nearly three times the rate of established businesses, and half expect revenue to grow over the next year," said Paul Robson, Chief Executive Officer, MYOB.

Younger business owners are also demonstrating stronger optimism. Among respondents aged 18 to 30, 37% expect general economic conditions to improve next year, compared to an average of 24% across all businesses surveyed. Start-up confidence remains relatively high, with 25% predicting an improved outlook.

Cost pressures

Rising operational costs remain a key challenge for many SMEs, with the cost of utilities now cited as the leading pressure. Thirty per cent identified energy costs as a source of high or extreme pressure, marking an 11-point jump in just six months. The winding up of the Energy Bill Relief Fund at the end of December is expected to intensify this challenge, potentially leaving many businesses more exposed to higher energy expenses.

Other major cost concerns include shrinking margins and rising fuel prices, each reported as a top issue by a quarter of SMEs. Despite these difficulties, reports of pressure relating to interest rates, competition, customer retention, and labour shortages have softened since June. This shift indicates a slightly more stable trading environment as businesses enter the new year.

Digital tools

In response to cost and margin challenges, many SMEs are turning to technology to support productivity and efficiency. Digital adoption and use of AI tools is increasing as businesses seek to control costs and manage administrative workloads. Data from the survey highlights a gradual expansion of digital capability across the sector, with more businesses incorporating digital workflow solutions to manage operations.

Robson noted that SMEs are increasingly focused on strengthening their operational foundations through digitisation and technology shifts. "SMEs have endured a challenging few years, yet we're now seeing a genuine shift in confidence. Operators are adjusting to the new environment, focusing on what they can control, and increasingly turning to digital tools to enhance productivity and performance," said Robson.

Future outlook

Across measures such as profitability, investment intentions, and technology use, the survey points to a business sector establishing greater stability. While energy and fuel costs remain significant burdens, the easing of other pressures and the move toward digital transformation may position Australian SMEs for improved competitiveness.

"As SMEs strengthen their operating foundations, opportunities for digital uplift, particularly around energy management, workflow automation and AI, will play a critical role in boosting competitiveness and sustaining long-term success," said Robson.