The latest MYOB Small and Medium Size Enterprise (SME) Performance Indicator suggests Australian SMEs have maintained stability in the second quarter of 2025, though Gross Value Added (GVA) is 5% lower compared to this time last year.
According to the findings, the strongest-performing sectors over the last three months were mining, public administration and agriculture, while at the other end of the spectrum utilities, hospitality and arts and recreation show lower levels of performance. Overall, the SME community has demonstrated solid profitability and productivity as the economy continues to normalise post-pandemic.
Harnessing anonymised observations from more than 200,000 businesses with 1-19 employees, the MYOB SME Performance Indicator calculates GVA by calibrating small business performance against the economy as a whole, aggregating information from millions of transactional data points.
GVA is a measure of the value of goods and services produced in an area, industry, or sector of an economy. Productivity is calculated by measuring about how much output a business produces compared to the amount of input; the MYOB SME Performance Indicator indexes this against the overall GVA.
Paul Robson, CEO of MYOB, said the most recent outcome points to continued stabilisation across 2025.
“The latest Indicator demonstrates that Australian SMEs have remained resilient. Profitability and productivity have held steady and payroll growth per employee has kept pace with the wider economy,” he said.
“We saw early signs of performance calibration at the end of 2024 and it’s pleasing to see this maintained in the first half of this year.
“Looking ahead, broader economic conditions are becoming more supportive for SMEs, with inflation easing and a recent cash rate cut from the RBA. These developments should provide some relief to Australian households, resulting in greater consumer spending.”
Increased local spending will be especially important to small businesses in light of Australia Post’s recent announcement regarding the low-value parcel tariffs for deliveries to the US, which may cause delivery disruptions, operational strain and additional costs for SMEs exporting to North America.
The SME sector has seen substantial movement since COVID-19, with a noticeable lift in new entrants from the startup sector and many SMEs sizing out of the sector as they transition into larger operations.
Despite a slight reduction in pandemic-era small business creation, as well as disruptive economic factors such as US tariffs, rising operating costs and reduced consumer spending, SMEs have maintained solid profitability and productivity, demonstrating the resilience of this community.
Agriculture sector spotlight
Recording a 13% rise in activity over the past year, Australia’s agricultural industry has continued to buck the trend with a 5% increase to its GVA over the quarter, making it the highest performing SME sector.
This growth was driven by strong agricultural commodity prices, both domestically and in export markets, alongside robust overseas demand and increased productivity, which can be attributed in part to increasing technology adoption and digitisation within the sector. New digital tools, automation and transformative technology have enabled greater productivity with a lower headcount, illustrated by a decrease in employment figures in the sector from 360,000 to around 300,000 over the last five years.
The findings indicate that momentum looks to remain positive for the agricultural industry, although economic obstacles such as the continuation of US tariffs could pose a risk.
“The uplift in performance for Australian small businesses within the agricultural sector is encouraging for the industry and the SME sector more broadly,” said Paul.
“The resilience of agricultural SMEs is further reflected by their growth amidst significant hurdles, including the introduction of US tariffs and several flood events that caused localised disruption for many of our farmers.”
With small businesses contributing around a third of the country’s GDP, the MYOB SME Performance Indictor provides valuable insight into the current and future state of the small business landscape, particularly in relation to productivity.
While growth in the last 12 months has largely been confined to industries benefiting from significant price movements, predominately mining and agriculture, Associate Director and economist Alex Hooper of Oxford Economics Australia said the signs are positive for growth in other sectors in the coming 12 months.
“Even as the number of SMEs has eased back from pandemic highs, the sector continues to demonstrate remarkable resilience,” she said.
“Individual business profitability and productivity, underpinned by strong payroll growth, highlights the ability of SMEs to lift wages in line with broader economic trends.
“This adaptability has allowed SMEs to turn a period of adjustment into a platform for future growth. And, with rate cuts and easing inflation creating a more supportive environment, SMEs are well positioned to continue contributing meaningfully to Australia’s economy.”
The MYOB Business Monitor: SME Performance Indicator can be found here.
About MYOB MYOB is a leading provider of cloud-based business management solutions with a core purpose of helping more businesses in Australia and New Zealand to start, survive and succeed. MYOB’s next-generation technology platforms deliver end-to end solutions for people and finance through to tax, supply chain, projects, employees and customers, empowering businesses with 0 to 1000 employees alongside a network of accountants, bookkeepers and consultants. For more information visit myob.com or follow MYOB on LinkedIn.