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Cost pressures continue to impact businesses

Over a third (38 per cent) of all businesses expect to increase the price of their goods or services over the next three months by more than usual, a similar result to March 2022, according to data released by the Australian Bureau of Statistics.

Cost pressures continue to impact businesses
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ABS head of industry statistics, John Shepherd, said most of these businesses were finding that increases in the cost of products and services (92 per cent) and fuel and/or energy costs (78 per cent) were leading factors for planned price increases.

Businesses indicated that the other factors contributing to the price increases were other business overheads (50 per cent), staff costs (38 per cent), customer demand (37 per cent) and cost of finance (interest rates 25 per cent).

The survey results also showed nearly half (48 per cent) of all businesses have no plans to increase their prices over the next three months.

“Of these businesses, nearly half (46 per cent) said it was to retain customers and 46 per cent said they had fixed-price contracts in place,” Mr Shepherd said.

The results also provided information about planned capital expenditure over the next three months. Almost one in five businesses (18 per cent) have planned capital expenditure in May 2022, consistent with findings in May 2021 (17 per cent).

Nearly half (48 per cent) of businesses planning capital expenditure indicated it would be higher than what is usual for this time of year, fewer than a year ago when 59 per cent planned for higher expenditure. 

The biggest influencing factors on whether businesses were planning for capital expenditure were uncertainty about the future state of the economy (25 per cent) and supply chain disruptions (23 per cent). 

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