A new report has revealed First Nations businesses registered and certified by Supply Nation recorded a 65 per cent surge in total supply contracts to $3.8 billion for the 2022 financial year.
The encouraging data from the latest Supply Nation research - compiled by accounting firm EY - was despite the number of supplier registrations to the First Nations business group rising 19 per cent to 3,594, compared with a 30 per cent increase in FY21.
Established in 2009 to support the Indigenous business sector, Supply Nation has 722 members comprising government bodies and public and private corporations that want to engage with its registered First Nations businesses.
The 65 per cent increase in value of total contracts from members over FY22 compared to a 39 per cent rise a year earlier, with government contracts representing the biggest expenditure in FY22 at $1.7 billion - or 45 per cent - of the total, more than double the government spend in FY21.
However only 52 per cent of Supply Nation suppliers accounted for all contracts secured during the year, with the biggest share outside the government sector coming from construction and mining, with facilities management and real estate rounding out the top five categories of revenue.
Supply Nation CEO Michelle Deshong said the latest report gave the group important insight into whether procurement decisions were influenced by Supply Nation enterprises being registered or certified, with the latter requiring businesses to be at least 51 per cent Indigenous owned.
"Our research shows that members are more likely to procure from certified suppliers over registered suppliers," she said.
"Certified suppliers accounted for $2.3 billion in contract revenue, or 60 per cent of the total revenue reported, and received three times as many contracts as registered suppliers.
"This sends an important message to the more than 2,000 suppliers with Supply Nation that are classified as registered but have the potential to become certified as they have 51 per cent or more Indigenous ownership.
"These suppliers are potentially missing out on contracts because of a distinct preference by some our members to purchase from certified suppliers."
Despite the massive growth by First Nations enterprises, the report revealed that 48 per cent of all registered Supply Nation suppliers reported no contract revenue for FY22, which it partly attributed to the lead time for new businesses being registered and how long it took for them to secure supply contracts.
The report conceded a more qualitative analysis was required to determine the reason for businesses failing to record supply contracts.
The Supply Nation survey showed industries most affected by COVID-19 in FY20 and FY21 had continued to show signs of recovery in FY22, especially within the tourism, arts, entertainment and food and hospitality sectors.
While female-led businesses comprised 28 per cent of registered suppliers, they represented just 14 per cent of the $3.8b of contracts for FY22, which was likely due to them being in industries with typically low-value contracts, such as education, training and domestic goods.
