New CommBank research shows the Australian accounting sector is experiencing renewed confidence in business conditions and ramping up growth opportunities, despite the disruption caused by the COVID-19 pandemic.
According to CommBank's latest Accounting Market Pulse report - an annual analysis of the accounting sector -perceptions of business conditions rebounded strongly to reach the highest level recorded in the survey's six-year history.
More than 80 per cent of firms reported stable or growing profits as competition among new service providers and disruptors eased. The uplift in confidence follows perceptions of business conditions reaching an all-time low in May 2020.
Commonwealth Bank Executive Manager of Professional Services, Business Banking, Belinda Hegarty, said: "Accounting firms continue to play a vital role in helping businesses navigate operating conditions as we emerge from the pandemic. This is fuelling strong demand which in turn has underpinned a dramatic rebound in confidence.
"Firms are fast-tracking their plans for growth to meet this demand and this is contributing to expectations of industry diversification, as well as acquisitions, as firms look to build capability and staff numbers."
The report found more than 70 per cent of firms will be putting greater emphasis on diversifying their offering beyond traditional accounting services as they prepare for increased activity in tax consulting and compliance, as well as property advisory and cybersecurity consulting.
Despite improved business conditions, firms continue to face challenges in finding and retaining strong talent. The report found leading firms* are more likely to be challenged when it comes to recruiting new employees.
As a result, more than three quarters of leading firms indicated plans to acquire other firms to grow their capability or staff in the next two years.
"We're seeing mid-size firms make acquisitions that will broaden their geographic footprint. Meanwhile, large firms see acquisitions as an opportunity to expand their offering while also increasing their staff numbers," said Ms Hegarty.
About the CommBank Accounting Market Pulse
The CommBank Accounting Market Pulse is an annual analysis of the trends shaping Australia's accounting industry. For more, visit commbank.com.au/business/business-insights/industries/professional-services
* Leading firms are defined as those with positive or stable financial, workforce, and operational performance throughout the pandemic.
