Energy bills bite as SMEs turn to digital & AI tools

Australian small and medium-sized businesses are reporting rising strain from energy bills as federal rebates end, even as revenue and confidence show early signs of recovery heading into 2026.

The latest MYOB Business Monitor survey of 1,087 SMEs shows energy costs have become the most immediate financial pressure for operators. The research also points to stabilising revenue trends and a modest lift in business confidence, particularly among younger owners and start-ups.

The federal Energy Bill Relief Fund finishes at the end of December. Many SMEs now expect higher power bills over the summer trading period without government support.

MYOB said the combination of rising tariffs and the loss of rebates is driving a sharp shift in what business owners see as their main operating risks.

Thirty per cent of respondents said energy bills are causing "a lot" or "extreme" pressure. This was an 11 percentage point rise in six months.

Many operators also reported concern about the timing of higher bills. The survey period covered the run-up to the peak retail and hospitality season, when cash flow is often stretched by higher inventory and staffing costs.

The data suggests many firms are now reviewing margins and pricing. Owners are also reconsidering patterns of energy use.

Shrinking margins and fuel costs both registered as key pressures, at 25 per cent each. Energy costs now sit above both issues across sectors.

Energy costs dominate

SMEs in energy-intensive sectors such as manufacturing, retail and hospitality face greater exposure to price movements. They also have fewer options to reduce short-term consumption without affecting trading hours or service levels.

Rising power bills are now affecting investment decisions. Some businesses are delaying upgrades or expansion plans as they reassess operating budgets.

Others are investigating longer-term efficiency measures. These include changes in equipment, lighting, refrigeration, or heating and cooling systems.

The survey indicates that owners see utility charges as less predictable than other costs. Many respondents described energy as a line item that can change abruptly and that is difficult to pass on in full to customers.

Confidence holds steady

Despite the sharper focus on power bills, overall sentiment in the SME sector has steadied. Nearly a quarter of respondents, or 24 per cent, expect economic conditions to improve. This is the same level as in June.

Younger business owners reported higher optimism. Thirty-seven per cent of those aged 18 to 30 predict an improvement in the broader economy.

Start-up operators also remain relatively positive. One in four of these businesses forecast better conditions in the year ahead.

Revenue performance is showing signs of stabilisation. Nineteen per cent of SMEs reported revenue growth, which is four percentage points higher than in June.

One in three of these growing businesses linked the lift in revenue to stronger consumer demand. This points to some recovery in spending despite higher household costs.

MYOB Chief Executive Paul Robson said the results among early-stage ventures are a notable feature of the survey.

"More than a third of start-ups reported higher revenue, nearly three times the rate of established businesses, and half expect revenue to grow over the next year," said Paul Robson, CEO, MYOB.

"It suggests new and early-stage businesses are adapting faster and capitalising on emerging opportunities," said Robson.

Adjusting to higher costs

Many SMEs are preparing for a prolonged period of elevated energy prices. Owners are seeking tighter control of overheads and cash flow as they enter 2026.

The survey shows that other operating pressures have eased slightly since mid-year. These include interest rates, customer retention, competition and labour shortages.

The relative shift suggests the operating environment is becoming more manageable in areas outside utilities. Business owners still face complex trade-offs between price, service and investment.

Robson said the latest findings point to a focus on operational discipline and cost management.

"SMEs have endured a challenging few years, yet we're now seeing a genuine shift in confidence.

"Operators are adjusting to the new environment, focusing on what they can control, and increasingly turning to digital tools to enhance productivity and performance."

"Operators are adjusting to the new environment, focusing on what they can control, and increasingly turning to digital tools to enhance productivity and performance," said Robson.

Digital and AI response

The report links rising bills with greater interest in digitisation, automation and artificial intelligence. Many SMEs see technology as a way to offset some cost pressures.

Owners are looking at software and digital platforms that reduce manual administration. They are also considering workflow automation that cuts wasted time and supports more accurate scheduling.

Some businesses are beginning to monitor and manage energy consumption through digital systems. These systems track usage patterns and alert owners to spikes or inefficiencies.

Across revenue expectations, profitability, investment intentions and technology use, survey responses indicate more future-oriented planning. Many SMEs are positioning for a landscape in which energy prices remain volatile.

Robson said further investment in digital tools will be important for SME competitiveness.

"As SMEs strengthen their operating foundations, opportunities for digital uplift - particularly around energy management, workflow automation and AI - will play a critical role in boosting competitiveness and sustaining long-term success," said Robson.