The latest ABS Business Conditions and Sentiments Survey showed that, in February, 30 per cent of businesses were impacted by reduced cash flow and 28 per cent by reduced demand, compared with 72 per cent and 69 per cent in April 2020, when businesses were last asked about these impacts.
Two in five (41 per cent) businesses reported being impacted by COVID-19 restrictions in February, compared to 53 per cent in April 2020.
The survey results also showed that for 41 per cent of businesses, cash on hand would cover less than three months of business operations, compared with 29 per cent in October and June 2020.
“Businesses provided comments on the COVID-19 restrictions impacting them. International and domestic border restrictions, capacity limits, and increased cleaning requirements were highlighted as concerns,” said ABS head of industry statistics John Shepherd.
Responding to the figures, CreditorWatch chief economist Harley Dale said it is “a little like the good, the bad and the ugly”.
“If we begin with the good — it’s encouraging that the number of businesses who feel like they were significantly affected by COVID-19-related circumstances and restrictions is down 12. As our economy continues to rebound, consumers are all cashed up and ready to spend, putting businesses in a good position to undo some of the negative effects associated with the pandemic,” Mr Dale said.
“The bad — we’re seeing the continuation of some troubling statistics. Thirty per cent of businesses reported cash flow as an inhibiting factor to their operations. While less than half the figure found in April 2020 (72 per cent), this is still far too high and reminds us we have a long way to go in what is still a nascent ‘COVID recovery’.
“Finally, the ugly. The data reveals 41 per cent of businesses could cover less than three months of business operations using cash on hand. Given the enormous weight the SME industry brings to Australia’s economic and social table, this is a worryingly large figure.”