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Australia’s mid-sized businesses are feeling the strain, with many saying the cash rate is now one of the biggest barriers to growth. The latest MYOB report, which surveyed more than 500 decision-makers in firms with 20 to 500 employees, found that higher borrowing costs are prompting companies to delay investment, hiring and expansion plans.
More than half of respondents reported revenue gains over the past year, yet MYOB chief executive Paul Robson said the elevated rate environment was causing businesses to rethink their next steps. Many are shelving equipment upgrades, putting off leasing new premises or delaying funded projects as the cost of capital bites.
A quarter of surveyed firms said the cash rate would need to fall by at least one percentage point before they feel confident about ramping up activity. That highlights the broader tension in the economy. While energy and labour costs are easy to spot, the drag from higher interest rates is proving just as influential, chipping away at momentum behind the scenes.
Given the vital role mid-sized firms play in employment and investment, prolonged rate pressure risks slowing the wider economy. For now, many business leaders are focusing on productivity gains and tighter capital management while they wait for conditions to ease.
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