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Business Conditions and Sentiments

Insights into Australian business conditions and sentiments.

Reference period
March 2022
Released
31/03/2022

Key statistics

  • 39% of all businesses expect the price of their goods and services to increase more than usual.
  • 40% of all businesses reported an increase in operating expenses over the last month compared to 24% the same time last year.
  • Almost one in five (19%) of employing businesses had staff unavailable due to COVID-19.

The March collection was conducted through a telephone based survey between 16 March and 23 March. 

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.

Changes in operating expenses

Businesses provided information about changes in operating expenses over the last month and expected changes over the next month.

In March 2022, 40% of businesses had experienced increases in their operating expenses over the previous month compared to 24% of businesses in March 2021.

When considering the month ahead, 35% of businesses expect operating expenses to increase. The proportion of businesses reporting increases in operating expenses for both the past and future month have reached their highest levels since the survey question was first asked in July 2020.

(a) Proportions are of all businesses.
(b) Businesses reported changes over the last month.
(c) Expectations for the indicated month as reported by businesses in the previous month of collection. 
(d) The Survey of Business Conditions and Sentiments was not conducted between July 2021 to December 2021 (inclusive).  

As information is collected via a telephone interview, additional insights into the drivers for change may be provided as comments by the business. In March 2022, of the businesses that provided additional comments, over half noted rising cost of fuel, materials and supplies, as well as labour and staffing costs as contributing to increased operating expenses.

Price of goods and services

Businesses provided information about how they expected the price of goods and services sold by businesses to change over the next three months. This is the first time these questions have been included in the survey.

Overall, 39% of all businesses reported that they expected the price of their goods or services to increase over the next three months.

Small businesses were more likely than medium and large businesses to expect the price of their goods and services to increase over the next three months (39% compared with 37% and 28%).

More than half of all businesses in Retail trade (59%), Construction (58%), Manufacturing (55%) and Electricity, gas, water and waste services (54%) expect increases in the price of their goods and services over the next three months.

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

Of the 39% of businesses that expect to increase their prices, the majority indicated that rising fuel or energy prices (88%) and increases to the costs of products or services used by the business (88%) were contributing factors.

Almost one in ten businesses (9%) anticipating price increases noted other factors. These included supply chain disruptions, recent floods and geopolitical world events.

    Factors impacting the price of goods or services
    Factors impacting the price of goods or services (a)(b)
    Staff related costs - Increase in other staff related costs 23%, Increase in staff wages or salaries 28%,
    Other operating costs (not staff related) - Increase in the cost of fuel and / or energy 88%, Increase in the cost of products or services used by this business 88%, Increase in other business overheads 55%
    Demand - Increased customer demand 26%
    Other factors - Other factors 9%

    (a) Proportions are of businesses expecting the price of their goods or services to increase over the next three months.
    (b) Businesses could select more than one response.





    Factors impacting the price of goods or services (a)(b)

     Small businessesMedium businesses Large businessesAll businesses
     %%%%
    Staff related costs    
    Increase in staff wages or salaries27424728
    Increase in other staff related costs23323623
    Any staff related costs (d)34485135
    Other operating costs (c)    
    Increase in the cost of products or services used by this business88898188
    Increase in the cost of fuel and / or energy89837788
    Increase in other business overheads56453755
    Any other operating costs (d)97959097
    Demand26262726
    Other factors912139
         

    (a) Proportions are of businesses expecting the price of their goods or services to increase over the next three months.
    (b) Businesses could select more than one response.
    (c) Excludes staff related costs.
    (d) Proportions are of all businesses in each output category.

    Business ability to meet financial commitments

    Businesses provided information on their ability to meet financial commitments over the next three months. This information was previously collected in August 2020, March 2021 and June 2021.

    In March 2022, almost a quarter (22%) of businesses expect it to be difficult or very difficult to meet their financial commitments over the next three months. This compares to approximately one in six businesses in June 2021 (16%) and March 2021 (17%).

    How difficult or easy it will be for businesses to meet its financial commitments over the next three months, selected months (a)

     March 2021June 2021March 2022
     %%%
    Very difficult444
    Difficult131218
    Neither difficult nor easy303634
    Easy343128
    Very easy121010
    Don't know664

    (a) Proportions are of all businesses.

    Small businesses were more likely than medium and large businesses to anticipate it being difficult or very difficult to meet their financial commitments (23% compared with 20% and 11%).

    (a) Proportions are of all businesses
    (b) The sum of the component items does not equal 100% because businesses could respond "Not applicable".

    The Manufacturing (46%), Transport, postal and warehousing (46%) and Accommodation and food services (41%) industries had the greatest proportion of businesses that expect to have difficulty meeting their financial commitments over the next three months.

    For each of these industries, there was a greater proportion of businesses expecting difficulty in March 2022 compared to  March 2021.

    Conversely, Arts and recreation services (32%), Construction (14%) and Mining (12%) had significant decreases in the proportions of businesses that anticipate difficulty meeting their commitments compared to March 2021.

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

    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 has been collected each month since January 2022 and in April 2021.

    More than two in five (41%) businesses are currently experiencing supply chain disruptions. This is an increase compared to February 2022 (37%), but less than January 2022 (47%). 

    The industries having the greatest proportion of businesses experiencing supply chain disruptions in March 2022 continue to be Retail trade (81%), Manufacturing (75%) and Wholesale trade (64%).

    (a) Proportions are of all businesses.
         

    Businesses with supply chain disruptions provided information about the extent to which they are being affected. In March 2022:

    • 38% were affected to a great extent (e.g., major delays / cannot obtain certain items and significant impact on revenue).
    • 58% were affected to a small extent (e.g., some delays but little impact on revenue); and
    • 1% were not affected at all.

    (a) Proportions are of businesses experiencing supply chain disruptions.                                                                                                                                                                                                 

    Employee unavailability due to factors related to COVID-19

    In March 2022, 19% of employing businesses had staff that were unavailable due to COVID-19 related issues, an increase from 15% of employing businesses in February 2022. 

    For businesses who reported COVID-19 impacted staff availability, 43% advised that caring responsibilities were a factor in March, an increase compared to February (26%).  This coincides with COVID-19 impacting the operation of schools and day care centres across the country. 

    (a) Proportions are of businesses that indicated availability of employees was affected by factors related to COVID-19.
    (b) Businesses could provide more than one response to the question.    

    Data downloads

    Business Conditions and Sentiments, March 2022

    Previous catalogue number

    This release previously used catalogue number 5676.0.55.003

    Post release changes

    31/03/2022 - The table "Factors impacting the price of goods or services" has been updated for the following rows:
    "Any staff related costs" for Medium businesses, Large businesses and All businesses,
    "Increase in the cost of products or services used by this business" for Medium businesses. 

    The graph "Businesses expecting it difficult to meet financial commitments over the next three months, by industry" has been updated for industries of Manufacturing, Wholesale trade, Transport, postal and warehousing, Healthcare and social assistance.

    01/04/2022 - The graph "Increase in operating expenses, actual and expected" has been updated for July 2020 (actual), August 2020 (expected) and October 2020 (expected).