Business Conditions and Sentiments

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Insights into Australian business conditions and sentiments.

Reference period

January 2022

Released

11/02/2022

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Key statistics

Nearly a quarter (22%) of employing businesses have employees currently unavailable due to factors related to COVID-19.
Almost half (47%) of all businesses are experiencing supply chain disruptions.
Small businesses were more likely to be greatly impacted by supply chain disruptions (36%).

This is the first Business Conditions and Sentiments release since June 2021. A summary of question themes included in each monthly release between March 2020 to January 2022 is available in Data downloads.

The January collection was conducted through a telephone based survey between 27 January and 4 February.

In responding to the survey, businesses are asked to provide a best estimate only, without accessing records or reports.

Business size categories used in this release:

Small (0-19 persons employed);
Medium (20-199 persons employed); and
Large (200 or more persons employed).

For information on survey sample, response rates and the questionnaire, see Methodology.

Supply chain disruptions

A supply chain is a logistics network between a business and its suppliers to produce and distribute a product to the customer. A supply chain disruption is an interruption to that network.

Businesses were asked if they are currently experiencing any supply chain disruptions. This information was last collected in April 2021.

Nearly half (47%) of all businesses are currently experiencing supply chain disruptions, an increase compared to April 2021 (30%).

These businesses provided information on the extent to which they are being affected:

36% were affected to a great extent (e.g. major delays / cannot obtain certain items and significant impact on revenue);
61% were affected to a small extent (e.g. some delays but little impact on revenue)
2% were not affected at all.

Small businesses were more likely than medium and large businesses to report being affected by supply chain disruptions to a great extent (36% compared with 32% and 31%).

The industries with the greatest proportion of businesses experiencing supply chain disruptions in January 2022 were Wholesale trade (75%), Retail trade (71%) and Manufacturing (65%).

For each of these industries, there was a larger proportion of businesses experiencing supply chain disruptions in January 2022 compared to April 2021.

Manufacturing and Retail trade also had an increase in the proportion of businesses that were greatly impacted by supply chain disruptions. Wholesale trade had a smaller proportion of businesses that were impacted to a great extent in January 2022 compared to April 2021.

Image

Top industries(a) experiencing supply chain disruptions

Description

Top industries experiencing supply chain disruptions: January 2022 Wholesale trade 75% Experiencing supply chain disruptions (a), 43% Were affected to a great extent (b), Retail trade 71% Experiencing supply chain disruptions (a), 37% Were affected to a great extent (b), Manufacturing 65% Experiencing supply chain disruptions (a), 39% Were affected to a great extent (b). April 2021: Manufacturing 55% Experiencing supply chain disruptions (a), 18% Were affected to a great extent (b), Retail trade 52% Experiencing supply chain disruptions (a), 19% Were affected to a great extent (b), Wholesale trade 50% Experiencing supply chain disruptions (a), 60%Were affected to a great extent (b).

Changes made by businesses in response to supply chain disruptions

The businesses experiencing supply chain disruptions also provided information on modifications made in response to those disruptions. Most of these businesses (86%) had made at least one modification in January 2022.

In January 2022, 50% of businesses with supply chain disruptions changed their ordering processes, compared to 62% of businesses with supply chain disruptions in April 2021.

In comparison, a greater proportion of businesses with supply chain disruptions increased the price of goods and services in January 2022 compared to April 2021 (42% compared to 34%).

Changes made by businesses in response to supply chain disruptions (a)(b)
	January 2022	April 2021
Changed ordering processes	50	62
Increased price of goods or services	42	34
Increased number of suppliers	36	36
Changed the way products or services are provided to customers (c)	35	41
Changed type and range of products or services	33	37
Changed operational processes (d)	32	32
Changed suppliers	29	39
Changed mode of freight	15	19
Other modifications	14	4

Changes made by businesses in response to supply chain disruptions (a)(b)

["","January 2022","April 2021"]

[["Changed ordering processes","Increased price of goods or services","Increased number of suppliers","Changed the way products or services \nare provided to customers (c)","Changed type and range of products \nor services","Changed operational processes (d)","Changed suppliers","Changed mode of freight","Other modifications"],[[50],[42],[36],[35],[33],[32],[29],[15],[14]],[[62],[34],[36],[41],[37],[32],[39],[19],[4]]]

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(a) Proportion of businesses experiencing supply chain disruptions.
(b) Respondents can choose more than one option.
(c) e.g. adjusted customer allocations, adjusted order processing timeframe, shifted more operations online.
(d) e.g. changed methods of producing goods or services.

Staff shortages

In January 2022, 18% of employing businesses did not have enough employees based on current operations, compared to 19% in June 2021 and 12% in March 2021. There was a small rise in the proportion of medium and large businesses that had staff shortages compared to June 2021.

Businesses that do not have a sufficient number of employees, by employment size (a)
	Small businesses	Medium businesses	Large businesses
December 2020	15	23	12
June 2021	19	20	18
January 2022	17	29	23

Businesses that do not have a sufficient number of employees, by employment size (a)

["","Small businesses","Medium businesses","Large businesses"]

[["December 2020","June 2021","January 2022"],[[15],[19],[17]],[[23],[20],[29]],[[12],[18],[23]]]

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(a) Proportions are of employing businesses.

Rental, hiring and real estate services (36%) and were the most likely to report staff shortages in January 2022. This was considerably higher than June 2021 (14%) for this industry.

Businesses having an insufficient number of employees, by industry (a)(b)
	No
Rental, Hiring and Real Estate Services	36
Administrative and Support Services	28
Accommodation and Food Services	26
Mining	24
Construction	23
Electricity, Gas, Water and Waste Services	23
Transport, Postal and Warehousing	22
Education and Training	21
Information Media and Telecommunications	21
Other Services (b)	21
Arts and Recreation Services	19
Professional, Scientific and Technical Services	15
Manufacturing	15
Retail Trade	7
Wholesale Trade	7
Financial and Insurance Services	6
Health Care and Social Assistance	6

Businesses having an insufficient number of employees, by industry (a)(b)

["","No"]

[["Rental, Hiring and Real Estate Services","Administrative and Support Services","Accommodation and Food Services","Mining","Construction","Electricity, Gas, Water and Waste Services","Transport, Postal and Warehousing","Education and Training","Information Media and Telecommunications","Other Services (b)","Arts and Recreation Services","Professional, Scientific and Technical Services","Manufacturing","Retail Trade","Wholesale Trade","Financial and Insurance Services","Health Care and Social Assistance"],[[36],[28],[26],[24],[23],[23],[22],[21],[21],[21],[19],[15],[15],[7],[7],[6],[6]]]

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(a) Proportions are of employing businesses.
(b) Includes repair and maintenance, personal (e.g. hairdressers) and other services.

Factors influencing businesses with staff shortages

The 18% of businesses that had an insufficient number of employees reported on factors that were influencing the number of staff. Businesses were influenced by:

inability to find suitable staff (69%);
uncertainty due to COVID-19 (62%);
availability of existing employees to work (53%);
affordability of additional staff (44%);
international border closures (44%).
domestic border closures (33%); and
difficulty retaining staff (30%).

Factors influencing number of employees for businesses with insufficient staff, by employment size (a)(b)
	Small businesses	Medium businesses	Large businesses
Inability to find suitable staff	66	91	92
Uncertainty due to COVID-19	62	68	66
Availability of existing employees to work	51	64	70
Affordability of additional staff	46	22	30
International border closures	44	43	54
Domestic border closures	33	34	37
Difficulty retaining staff	29	44	53

Factors influencing number of employees for businesses with insufficient staff, by employment size (a)(b)

["","Small businesses","Medium businesses","Large businesses"]

[["Inability to find suitable staff","Uncertainty due to COVID-19","Availability of existing employees to work","Affordability of additional staff","International border closures","Domestic border closures","Difficulty retaining staff"],[[66],[62],[51],[46],[44],[33],[29]],[[91],[68],[64],[22],[43],[34],[44]],[[92],[66],[70],[30],[54],[37],[53]]]

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(a) Proportions are of employing businesses with an insufficient number of employees.
(b) Businesses could select more than one response.

Employee availability relating to COVID-19 factors

Businesses were also asked whether any of their existing employees were currently unavailable due to COVID-19. This is the first time these questions have been included in the survey.

Just over one in five (22%) of all employing businesses reported that employees were unavailable due to COVID-19.

Large businesses were more likely than medium and small businesses to report employees being unavailable (65% compared with 54% and 20%). More than two in five businesses in Information media and telecommunications (45%), Rental, hiring and real estate services (44%) and Accommodation and food services (41%) had reduced staff availability due to COVID-19.

Employees unavailable due to COVID-19, by industry (a)(b)(c)
	Yes	No	Don't know
Information Media and Telecommunications	45	55	1
Rental, Hiring and Real Estate Services	44	56	0
Accommodation and Food Services	41	58	1
Education and Training	39	60	1
Construction	28	66	6
Mining	28	71	1
Electricity, Gas, Water and Waste Services	26	74	1
Manufacturing	23	71	6
Arts and Recreation Services	21	62	18
Other Services (b)	21	66	13
Health Care and Social Assistance	21	71	5
Administrative and Support Services	20	78	2
Wholesale Trade	15	85	0
Retail Trade	10	85	6
Transport, Postal and Warehousing	10	83	7
Professional, Scientific and Technical Services	10	87	3
Financial and Insurance Services	7	81	6

Employees unavailable due to COVID-19, by industry (a)(b)(c)

["","Yes","No","Don't know"]

[["Information Media and Telecommunications","Rental, Hiring and Real Estate Services","Accommodation and Food Services","Education and Training","Construction","Mining","Electricity, Gas, Water and Waste Services","Manufacturing","Arts and Recreation Services","Other Services (b)","Health Care and Social Assistance","Administrative and Support Services","Wholesale Trade","Retail Trade","Transport, Postal and Warehousing","Professional, Scientific and Technical Services","Financial and Insurance Services"],[[45],[44],[41],[39],[28],[28],[26],[23],[21],[21],[21],[20],[15],[10],[10],[10],[7]],[[55],[56],[58],[60],[66],[71],[74],[71],[62],[66],[71],[78],[85],[85],[83],[87],[81]],[[1],[0],[1],[1],[6],[1],[1],[6],[18],[13],[5],[2],[0],[6],[7],[3],[6]]]

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(a) Proportions are of employing businesses.
(b) Includes repair and maintenance, personal (e.g. hairdressers) and other services.
(c) The sum of the components may not equal 100% due to rounding.

COVID-19 related factors affecting employee availability

Those businesses where COVID-19 affected the availability of their employees, were asked for further information. Businesses could provide multiple responses.

Image

Description

COVID-19 factors that affected employee availability: Self isolation or quarantine requirements 82%, staff have COVID-19 symptoms or illness 73%, Caring responsibilities 41%, Pending COVID-19 test results 33%, Concerns about catching COVID-19 21%.

Businesses were also able to provide insights into other COVID-19 factors that impacted staff availability. Of the 22% of businesses where employee availability was impacted by COVID-19, 9% had other factors. The most frequent comments were related to vaccination requirements and employee unwillingness to get COVID-19 vaccinations. The next most common theme was the impact of border closures.

Changes in revenue

Businesses reported on changes in revenue over the last month and expected changes over the next month. This information was also collected each month between July 2020 and June 2021.

In January 2022, two in five (41%) of businesses reported decreased revenue. This compares to three in ten (31%) businesses in January 2021.

The proportion of businesses reporting an increase in revenue over the past month has fallen to 11% compared to 20% of businesses in January 2021.

Changes in revenue, selected months (a)(b)
	January 2021	June 2021	January 2022
Decreased	31	24	41
Stayed the same	43	61	44
Increased	20	13	11

Changes in revenue, selected months (a)(b)

["","January 2021","June 2021","January 2022"]

[["Decreased","Stayed the same","Increased"],[[31],[43],[20]],[[24],[61],[13]],[[41],[44],[11]]]

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(a) Proportions are of all businesses.
(b) Businesses reported changes over the last month.

Despite more businesses having reduced revenue in the previous month in January 2022 compared to January 2021, expectations for changes in revenue for the month ahead are similar to results from January 2021.

Monthly revenue expectations, selected months (a)(b)
	Decrease	Stay the same	Increase	Don't know
January 2021 - expectations over the next month	13	52	27	9
January 2022 - expectations over the next month	15	49	26	10

Monthly revenue expectations, selected months (a)(b)

["","Decrease","Stay the same","Increase","Don't know"]

[["January 2021 - expectations over the next month","January 2022 - expectations over the next month"],[[13],[15]],[[52],[49]],[[27],[26]],[[9],[10]]]

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(a) Proportions are of all businesses.
(b) The sum of the components may not equal 100% due to rounding.

Cash on hand

Cash on hand includes savings, assets that can easily be sold, and unused credit facilities. The objective of this question is to capture business perceptions of financial resilience based on conditions experienced at the time of collection.

Businesses were asked to describe the availability of cash on hand based on the business’s current level of revenue and expenditure. In responding, businesses are asked to provide a best estimate only, without accessing records or reports. This information was previously collected June 2020, October 2020, February 2021 and May 2021.

The proportion of businesses that reported their cash on hand could cover three months or more of business operations has reduced between May 2021 (43%) and January 2022 (39%).

In January 2022, large businesses were the most likely to report having six months or more cash on hand available (38%); compared to 25% of medium businesses and 24% of small businesses.

Length of time cash on hand could cover business operations, by employment size, January (a)
	Small businesses	Medium businesses	Large businesses
Less than 1 month	18	14	7
1 to less than 3 months	30	32	21
3 to less than 6 months	15	16	17
6 months or more	24	25	38
Don't know	12	13	16

Length of time cash on hand could cover business operations, by employment size, January (a)

["","Small businesses","Medium businesses","Large businesses"]

[["Less than 1 month","1 to less than 3 months","3 to less than 6 months","6 months or more","Don't know"],[[18],[30],[15],[24],[12]],[[14],[32],[16],[25],[13]],[[7],[21],[17],[38],[16]]]

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(a) Proportions are of all businesses.

Cash on hand compared to what is usual for this time of year

Over one third (35%) of businesses reported that cash on hand was lower than usual for this time of year.

Businesses were able to provide comments about factors influencing their cash on hand.

For businesses with lower cash on hand many noted that issues related to COVID-19 were responsible for reduced cash reserves. Most of these businesses reported that revenue had decreased as a result of diminished customer demand and reduced business operations due to COVID-19 restrictions and lockdowns as well as reduction in staff availability due to isolation or illness.

Of the 12% of businesses that reported cash on hand was higher than usual, comments from businesses indicated they had experienced increased demand and revenue as well as reduced expenditure.

Cash on hand compared to what is usual for this time of year, by employment size (a)
	Small businesses	Medium businesses	Large businesses	All businesses
	%	%	%	%
Higher than what is usual	12	13	11	12
The same as what is usual	44	43	53	44
Lower than what is usual	35	34	22	35
Don't know	9	10	14	9

(a) Proportions are of all businesses.

Data downloads

Data files

Business Conditions and Sentiments, January 2022
Download xlsx [138.7 KB]
Question theme summary, March 2020 to January 2022
Download xlsx [39.77 KB]

Previous catalogue number

This release previously used catalogue number 5676.0.55.003

Methodology

Business Conditions and Sentiments methodology, January 2022

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APA

Citation

Business Conditions and Sentiments

APA

Citation

Key statistics

Supply chain disruptions

Changes made by businesses in response to supply chain disruptions

Staff shortages

Factors influencing businesses with staff shortages

Employee availability relating to COVID-19 factors

COVID-19 related factors affecting employee availability

Changes in revenue

Cash on hand

Cash on hand compared to what is usual for this time of year

Data downloads

Data downloads

Business Conditions and Sentiments, January 2022

Question theme summary, March 2020 to January 2022

Previous catalogue number

Methodology

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APA

Business Conditions and Sentiments

APA

Key statistics

Supply chain disruptions

Changes made by businesses in response to supply chain disruptions

Staff shortages

Factors influencing businesses with staff shortages

Employee availability relating to COVID-19 factors

COVID-19 related factors affecting employee availability

Changes in revenue

Cash on hand

Cash on hand compared to what is usual for this time of year

Data downloads

Data downloads

Business Conditions and Sentiments, January 2022

Question theme summary, March 2020 to January 2022

Previous catalogue number

Methodology

Media releases

Staff absent in 22% of businesses due to COVID-19

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