More than a third (35%) of Australian businesses expect to find it ‘difficult’ or ‘very difficult’ to meet financial commitments over the next three months, according to the latest results from the Australian Bureau of Statistics (ABS).
The Business Impacts of COVID-19 Survey found that small businesses were almost twice as likely to report that they expected to find it difficult or very difficult, compared to large businesses (35% versus 18%).
Revenue is down and expenses are up
ABS Head of Industry Statistics, John Shepherd, said that 41% of businesses reported that revenue had fallen over the last month, while 22% had an increase in operating expenses.
“In addition, 28% of businesses expected a decrease in revenue over the next month,” he stated.
The survey also includes insights about how business expenditure on capital has changed over the last three months.
Most are reducing capital expenditure
“Almost a quarter of businesses (23%) reported they had decreased or cancelled their actual or planned capital expenditure compared to three months earlier,” Shepherd noted.
“Businesses reported that their decisions related to expenditure on capital were significantly influenced by uncertainty about the future state of the economy (59%), and future expected customer demand for their products or services (40%).”
Since the coronavirus lockdowns began, the ABS has conducted surveys to find out how employers are faring in the crisis.
Full effects of Vic lockdown still to come
The latest survey was conducted between 12 and 19 August, so the full effects of the imposition of stricter lockdowns in Victoria this month are perhaps yet to be felt.
According to the data, the industries most likely to experience financial difficulties over the next three months were businesses providing accommodation and food services (71% of firms), transport, postal and warehousing (56% of businesses), and arts and recreation services (48%).
Thirty-six percent of businesses said government support measures were influencing their investment decisions, while uncertainty about future economic conditions was impacting the investment decisions of 59% of organisations.