Agriculture SMEs rise 13%, while the total performance of small companies is falling by 5%. Paul Robson reveals which sectors win.
What happens: Australian small and medium -sized companies have maintained stability in the second quarter of 2025, although overall performance has fallen by 5% on an annual basis, with agriculture rising as the striking performer with 13% growth.
Why this matters: With SMEs that contributes around a third of GDP of Australia, these mixed results point to both resilience and emerging challenges that can reform the landscape of small companies as the economic conditions shift.
The newest Myob Small and Middle Enterprise Performance Indicator reveals a story about two economies, where agricultural machinery blooms while other sectors have difficulty retaining Momentum.
The use of anonymized observations of more than 200,000 companies with 1-19 employees, the indicator shows that gross added value has fallen by 5% compared to 2024, but a significant sectoral variation is under this main figure.
Agriculture Tart Trends
Agriculture has emerged as the clear winner, with an increase in 13% activity in the past year and an increase of 5% in GVA in the quarter, making it the best -performing SME sector.
This growth stems from strong agricultural raw materials prices, both in their own country and in export markets, in addition to robust overseas demand and increased productivity driven by technology acceptance.
“The increase in performance for Australian small companies in the agricultural sector is encouraging for the industry and the SME sector wider,” said Paul Robson, CEO of Myob.
“The resilience of SMEs of agriculture is further reflected by their growth in the midst of important obstacles, including the introduction of American rates and various flood events that caused a localized disruption for many of our farmers.”
Technology stimulates productivity
The success story of the agricultural sector is intrinsically linked to digital transformation. New digital tools, automation and transformative technology have made greater productivity possible with fewer employees, whereby employment figures have fallen from 360,000 to around 300,000 over the past five years.
This technology -driven efficiency contrasts sharply with wrestling sectors such as utilities, hospitality and art and recreation, which have recorded the lowest performance levels.
Mijnbouw and Public Administration have reached agriculture at the top of the implementation table in the last three months.
Rate cuts bring lighting
Looking ahead, the economic conditions are always supportive for SMEs, whereby inflation is relaxed and a recent reduction in cash rates of the reserve Bank of Australia.
“Wider economic conditions are always supportive for SMEs, whereby inflation is relaxed and a recent reduction in the cash rates of the RBA,” Robson explained. “These developments must offer some lighting to Australian households, resulting in larger consumer expenditure.”
Associate director and economist Alex Hooper of Oxford Economics Australia said that the signs are positive for growth in other sectors in the next 12 months.
“Even if the number of SMEs has returned from pandemic highlights, the sector continues to demonstrate remarkable resilience,” she said.
“Individual business profitability and productivity, supported by strong wage growth, emphasizes the ability of SMEs to eliminate wages in accordance with broader economic trends.”
Export challenges ahead
However, challenges threaten for export-oriented SMEs. The recent announcement of Australia Post with regard to low-value packet rates for deliveries to the US can cause the disruptions of delivery, operational tension and extra costs for companies that export to North America.
The continuation of American rates is a different risk, in particular for agricultural expiders who have performed strongly.
Despite this headwind, the SME sector has demonstrated a remarkable adaptability since COVID-19, with a substantial movement, including newcomers from the start-up sector and many companies that get further than the SME classification.
“This adaptability has enabled SMEs to convert a period of adjustment into a platform for future growth,” Hooper noted. “With tariff reductions and reducing inflation that creates a more supporting environment, SMEs are well positioned to continue to make sense to the Australian economy.”
The Myob indicator calculates GVA by calibrating small companies against the economy as a whole, collecting information from millions of transactional data points to provide insight into current and future landscape trends in small companies.
This article is based on the Myob MKB -PERFORMATION -SDICATOR Q2 2025 Report.
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