Cautious Optimism Isn't a Strategy: What SMEs Actually Need for 2026

MYOB’s December 2025 Business Monitor found that 19% of SMEs have seen revenue increase over the past six months — a four-point rise from the prior period. 26% expect revenue to grow in the year ahead. Among business owners aged 18-30, 37% expect economic conditions to improve.

The phrase appearing in nearly every economic outlook for 2026 is “cautious optimism.” Deloitte sees “green shoots.” The OECD describes a “gradual recovery.” CommBank notes the economy is “at a crossroads” with private activity rebounding.

For business owners, this language is frustrating. It acknowledges improvement while hedging against uncertainty. It offers direction without conviction. And most importantly, it doesn’t translate into action.

What the outlook actually shows

The economic data for 2026 is genuinely mixed — not uniformly positive or negative, but variable in ways that matter for different businesses.

Growth is returning, slowly. GDP growth reached 1.8% in late 2025 and is forecast to hit 2.0-2.3% through 2026-27. This is improvement, but it’s well below the 3.3% average of the three decades before the pandemic. Deloitte notes that living standards (per capita GDP) will remain below pre-pandemic trends for the best part of the next decade.

Inflation is sticky. Headline inflation reached 3.8% in late 2025 — above the RBA’s 2-3% target band. The unwinding of electricity rebates will push inflation higher through 2026 before it moderates. This is why the RBA held rates in December and why some economists now forecast rate rises rather than cuts.

Consumer spending is recovering, but unevenly. Households are spending more as real incomes rise and earlier rate cuts flow through. But discretionary spending remains constrained, particularly for hospitality, retail, and services businesses. Cost-conscious consumers are the new normal.

Cost pressures persist. Energy costs are rising post-rebate. Wages continue to grow above pre-pandemic averages. Insurance, particularly for construction and hospitality, remains expensive and hard to secure. These costs aren’t temporary — they’re structural.

The gap between conditions and performance

Here’s what the economic outlooks don’t tell you: aggregate conditions have never been a reliable predictor of individual business performance.

Throughout 2024-25, while insolvencies hit record levels, plenty of SMEs grew profitably. Throughout 2020-21, while the economy contracted, businesses that adapted quickly thrived. The relationship between macro conditions and micro outcomes is weak — and that’s actually good news.

It means your business performance in 2026 depends far more on what you do than on what happens around you.

What actually matters

The businesses that outperform their conditions share three characteristics:

They know their numbers — the right numbers. Not 50 KPIs on a dashboard. Three to five figures that actually predict performance: the leading indicators that tell them whether they’re on track before the P&L confirms it.

They have financial infrastructure, not just accounting. Their systems tell them where cash is going, which activities generate margin, and what’s coming in 60-90 days. They can model scenarios, not just report history.

They focus on high-impact, low-effort changes. They don’t pursue transformation programs or chase every opportunity. They identify the specific levers that move their business and work those relentlessly.

The 2026 opportunity

“Cautious optimism” is how economists hedge their bets. It’s not a strategy for running a business.

The opportunity heading into 2026 isn’t to wait and see how conditions evolve. It’s to build the visibility and discipline that let you perform regardless of conditions. The economy will do what the economy does. Your job is to ensure your business can navigate whatever comes.

That starts with knowing your numbers. Not all of them. The ones that matter.

Sources

MYOB Business Monitor December 2025; Deloitte Access Economics Business Outlook September 2025; OECD Economic Survey Australia 2025; CommBank View October 2025; RBA Statement on Monetary Policy August 2025; EY MYEFO Analysis December 2025.

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GBN Partners

The numbers that matter are the cheat sheet for the activities that count.