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The result from Hnry’s sole trader survey bucks a two-year trend of post-pandemic growth.
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Revenues fall for over 1 in 3 sole traders, survey finds
04 April 2024
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More than one in three sole traders recorded a decline in revenue last quarter, with newcomers and those in creative industries struggling the most, according to a recent survey conducted by accounting software firm Hnry.
The result bucked a two-year trend of post-pandemic growth, the survey said, with 37 per cent of sole traders reporting turnover declines – the lowest in two years.
With some 1.5 million sole traders across the country, including consultants, freelancers, contract tradies and healthcare workers, Hnry Australia managing director Karan Anand said their performance was “essential” to the economy and an indicator of its health.
“Our data shows us they’re doing it tough and feeling the lasting impact of inflation and back-to-back interest rate rises,” she said, with 38 per cent of sole traders reporting a decrease in revenue last quarter.
The RBA has lifted the interest rate 13 times between May 2022 and November 2023. It currently sits at a 12-year high of 4.35 per cent.
New sole traders struggled the most, the survey said. Over half (52 per cent) of sole trader businesses under two years old reported falling revenue, in contrast to 30 per cent of those aged 3-10 years, and 39 per cent over 11 years old.
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Some industries also fared worse than others, Hnry found. Most freelance creatives – including designers, photographers and marketing consultants – were neutral or pessimistic about their financial security and only 46 per cent were optimistic. Over 40 per cent also saw their income fall last quarter.
This comes despite the federal budget’s $286 million investment to renew and revive the arts, entertainment and cultural sector, with many businesses continuing to tighten their purse strings and keep work in-house that would have previously been outsourced to creatives.
Most health and wellness sole traders performed better, with two-thirds of health and wellness professionals reporting that they felt secure and only 28 per cent reporting a decrease in revenue. Hnry said the health sector was reaping the dividends of consumers prioritising spending on self-care and wellbeing in 2024.
Consultants (64 per cent) and contract tradies (63 per cent) also reported feeling secure, the survey found.
However, despite falling incomes, the outlook for the second half of the year had improved.
“The good news is that as economic pressures promise to ease, overall sole trader optimism, whilst modest, is on the rise - with 35 per cent feeling positive about the health of the economy in six months' time, a jump from 23 per cent in October 2023, and the highest since March 2022,” Anand said.
People who were sole traders also reported non-financial gains from being their own boss, she said. Most respondents were happy with their work-life balance (65 per cent) and wellbeing (58 per cent), while job satisfaction improved from 62 per cent to 66 per cent from October.
“The greater freedom and flexibility of self-employment continues to pay personal dividends,” Anand said.
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