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Business Indicators, Business Impacts of COVID-19

This release provides information on the incidence and nature of impacts due to COVID-19, as experienced by businesses operating in Australia

Reference period
August 2020
Released
27/08/2020

Key statistics

  • More than a third of businesses expect to find it difficult or very difficult to meet financial commitments over the next three months.
  • 28% of businesses expect to invest in capital over next three months.
  • Almost 1 in 4 business have decreased or cancelled capital expenditure compared to 3 months ago.

Business impacts of COVID-19 survey

This publication provides information on the incidence and nature of impacts due to COVID-19, as experienced by businesses operating in Australia.

Topics covered in this release include:

  • Business revenue, operating expenses and employment
  • Business ability to meet financial commitments
  • Business capital expenditure
     

The collection was conducted through a telephone survey between 12 August and 19 August 2020. The sample size was 2,000 businesses and the final response rate was 60% (1,202 responding businesses).

This release forms part of the suite of additional products that the ABS is producing to measure the impact of COVID-19. Future information collected in this survey will evolve to maintain relevance in a changing environment.

Business revenue, operating expenses and employment

Businesses reported on changes in revenue, operating expenses and number of employees over the last month and expected changes over the next month. Businesses were asked to provide a best estimate only, without accessing records or reports.

This information was also collected in the July 2020 survey. The following graphs show data reported in the July and August surveys.

Fewer businesses reported a decrease in revenue in August (41%), compared to July (47%). The proportion of businesses that expect revenue to decrease in September (28%) was lower compared to the proportion that reported a decrease in August (41%).

Changes reported in July(a) and August, and September expectations(b)(c)

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  1. As reported by businesses in July 2020 (Cat.No. 5676.0.55.003 - Business Indicators, Business Impacts of COVID-19, July 2020)
  2. As reported by businesses in August 2020
  3. Proportions are of all businesses
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  1. As reported by businesses in July 2020 (Cat.No. 5676.0.55.003 - Business Indicators, Business Impacts of COVID-19, July 2020)
  2. As reported by businesses in August 2020
  3. Proportions are of all businesses
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  1. As reported by businesses in July 2020 (Cat.No. 5676.0.55.003 - Business Indicators, Business Impacts of COVID-19, July 2020)
  2. As reported by businesses in August 2020
  3. Proportions are of all businesses

Business ability to meet financial commitments

More than a third of businesses (35%) reported they expect it to be difficult or very difficult to meet financial commitments over the next three months.

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  1. Proportions are of all businesses
  2. The sum of the component items does not equal 100% because businesses could respond "Dont know" or "Not applicable"
  3. Proportions are the sum of responses of "Easy" and "Very easy"
  4. Proportions are the sum of responses of "Difficult" and "Very difficult"

Small and medium sized businesses were almost twice as likely as large businesses to report they expect it to be difficult or very difficult to meet financial commitments over the next three months (35% and 33% compared to 18%).

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  1. Proportions are of all businesses
  2. Proportions are the sum of responses of "Easy" and "Very easy"
  3. Proportions are the sum of responses of "Difficult" and "Very difficult"
  4. Modified conditions could include, but are not limited to, changes to products and services and how they are provided to customers, workforce changes, new hygiene protocols, changes to suppliers and limiting occupancy

Businesses currently operating under modified conditions (39%) were more than twice as likely to report they expect it to be difficult or very difficult to meet financial commitments over the next three months, compared to those operating as normal (16%).

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  1. Proportions are the sum of responses of "Difficult" and "Very difficult"
  2. Proportions are of all businesses

Business capital expenditure

Businesses reported information relating to:

  • Actual and planned capital expenditure compared to three months ago;
  • Factors significantly influencing business expenditure on capital; and
  • Capital expenditure intentions over the next three months.
     

Capital expenditure refers to acquisition of new or used assets e.g. vehicles, machinery and equipment, buildings and other structures.

For information about the differences between the ABS quarterly Survey of New Capital Expenditure and this survey, please see the Methodology.

Businesses were asked to provide a best estimate only, without accessing business records or reports.

Actual and planned capital expenditure compared to three months ago

Businesses reported how actual or planned capital expenditure had changed compared with three months ago.

  • 23% reported they had decreased or cancelled their actual or planned capital expenditure
  • 25% reported that expenditure stayed the same
  • 12% reported that expenditure had increased
     

Over a third (37%) had no actual or planned expenditure on capital.

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  1. Proportions are of all businesses
  2. Proportions are the sum of responses of "Decreased" and "Cancelled"

Significant factors influencing business expenditure on capital

More than three quarters (76%) of all businesses reported at least one factor had significantly influenced their expenditure on capital.

Significant factors influencing business expenditure on capital(a)(b)

Significant factors influencing business expenditure on capital(a)(b)

Significant factors influencing business expenditure on capital(a)(b)

This image shows the significant factors influencing business expenditure on capital grouped into themes and the proportion of businesses that reported each factor.

Factors relating to external conditions were future economic uncertainty (59%) and modifications in response to COVID-19 (28%).

Demand factors were future expected demand (40%) and current demand (33%).

Financial factors were access to own funds (33%) and access to external finance (23%).

Government support factors were other government support measures(d) (36%) and instant asset write-off(c) (22%).
  1. Proportions are of all businesses
  2. Businesses could provide more than one response to the question
  3. From 12 March 2020 until 31 December 2020 the instant asset write-off scheme for businesses has been expanded from assets worth $30,000 to include assets worth up to $150,000. Business eligibility has also increased from an aggregated turnover of less than $50 million to less than $500 million
  4. For example, Boosting Cash Flow for Employers, Government backed-business loans, Backing business investment – accelerated depreciation
     

Significant factors influencing business expenditure on capital, by employment size(a)(b)

 Small businesses (0-19 persons)Medium businesses (20-199 persons)Large businesses (200 or more persons)
 
%
%
%
Current customer demand for products or services
33
41
34
Future expected customer demand for products or services
40
47
47
Access to business's own funds
33
39
30
Access to external finance
23
23
22
Changes made to the instant asset write-off (c)
22
23
10
Other Government support measures (d)
36
35
21
Uncertainty about the future state of the economy
59
61
55
Business modifications in response to COVID-19
28
31
39
At least one factor (e)
76
81
76
a. Proportions are of all businesses
b. Businesses could provide more than one response to the question
c. From 12 March 2020 until 31 December 2020 the instant asset write-off scheme for businesses has been expanded from assets worth $30,000 to include assets worth up to $150,000. Business eligibility has also increased from an aggregated turnover of less than $50 million to less than $500 million
d. For example, Boosting Cash Flow for Employers, Government backed-business loans, Backing business investment – accelerated depreciation
e. Businesses that selected at least one of the listed factors or “Other factors”

 

Small and medium sized businesses were more likely to report that changes to the instant asset-write off and other government support measures influenced business expenditure on capital compared to large businesses.

Almost two in five large businesses (39%) reported that business modifications made in response to COVID-19 had influenced expenditure on capital, compared with 28% of small businesses and 31% of medium sized businesses.

Capital expenditure intentions over the next three months

More than a quarter (28%) of all businesses reported capital expenditure intentions over the next three months. By employment size, the proportion of businesses that reported capital expenditure intentions were:

  • 27% of small businesses
  • 35% of medium sized businesses
  • 55% of large businesses
     
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  1. Proportions are of all businesses
  2. Businesses could provide more than one response to the question


Across all asset types, large businesses were more likely to report capital expenditure intentions over the next three months compared to small and medium sized businesses.
 

Proportion of businesses that reported capital expenditure intentions over the next three months, by type of asset, top reporting industries(a)(b)

Type of assetTop reporting industries
IT hardware or software36% Financial and insurance services
28% Wholesale trade
18% Professional, scientific and technical services
Registered road vehicle15% Transport, postal and warehousing
12% Other services
10% Manufacturing
Other equipment or machinery27% Other services
24% Construction
23% Accommodation and food services
Buildings and other structure16% Other services
10% Health care and social assistance
9% Mining
a. Proportions are of all businesses
b. Businesses could provide more than one response to the question

Business impacts of COVID-19 visual summary

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Business Impacts of COVID-19 Survey results

The following section describes the visual summary presented above.

Business Impacts of COVID-19 Survey results, August 2020 include business revenue, operating expenses and employment; business ability to meet financial commitments; and business capital expenditure.

  • 28% of businesses expect to invest in capital over next three months.
  • Businesses are most likely to invest in: IT hardware or software (16%); Other equipment or machinery (16%); Registered road vehicles (6%); Buildings and other structures (5%).
  • Most common factors influencing capital expenditure: Uncertainty about future economy (59%); Expected future demand for products or services (40%); Government support measures (36%); Access to business’s own funds (33%); Current demand for products or services (33%).
  • Almost 1 in 4 business have decreased or cancelled capital expenditure, compared to 3 months ago.
  • Small businesses more likely to expect difficulty meeting financial commitments over next 3 months. Results by business size: Small business 35%, Medium business 33%, Large Business 18%.
  • Industries most likely to experience difficulty: Accommodation and Food Services (71%); Transport, Postal and Warehousing (56%); Arts and Recreation Services (48%).

 

Detailed data on the impacts of COVID-19 can be found at abs.gov.au/covid19

Technical note - questionnaire

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Business impacts of COVID-19 survey

1(a) Is this business currently trading?
 ☐ Yes [Go to Question 2]
 ☐ No [Go to Question 1b]
  
 (b) Is the halt in business trading a result of COVID-19?
 ☐ Yes, as a result of COVID-19 [Go to Question 3]
 ☐ No, business is trading as normal or has modified conditions not due to COVID-19 [End of survey]
  
2Is the business currently trading under modified conditions, as a result of COVID-19?
 [NOTE: Operating under modified conditions as a result of COVID-19 conditions, may include, but are not limited to; changes to products and services and how they are provided to customers, workforce changes, new hygiene protocols, changes to suppliers, limiting occupancy etc]
 ☐ Yes
 ☐ No, business is operating as normal
   
3Does this business employ any staff? 
 [Note: This includes all employees on the books and not currently working]
 ☐ Yes
 ☐ No
  
4(a) Over the past month, has revenue increased, decreased or stayed the same?
 ☐ Increased
 ☐ Decreased
 ☐ No change
 ☐ Don't know
  
 (b) And over the next month, do you expect revenue will increase, decrease or stay the same?
 ☐ Increase
 ☐ Decrease
 ☐ No change
 ☐ Don't know
  
 (c) Over the past month, have operating expenses increased, decreased or stayed the same?
 ☐ Increased
 ☐ Decreased
 ☐ No change
 ☐ Don't know
  
 (d) And over the next month, do you expect operating expenses will increase, decrease or stay the same?
 ☐ Increase
 ☐ Decrease
 ☐ No change
 ☐ Don't know
  
 (e) Over the past month, have the number of employees increased, decreased or stayed the same?
 ☐ Increased
 ☐ Decreased
 ☐ No change
 ☐ Don't know
  
 (f) And over the next month, do you expect the number of employees will increase, decrease or stay the same?
 ☐ Increase
 ☐ Decrease
 ☐ No change
 ☐ Don't know
  
5(a) Over the next 3 months, how easy or difficult will it be for this business to meet its financial commitments?
 ☐ Very difficult
 ☐ Difficult
 ☐ Neither easy nor difficult
 ☐ Easy
 ☐  Very easy
 ☐  Not applicable as my business does not have any financial commitments over the next three months
 ☐ Don’t know
  
6(a) Have the following factors significantly influenced this business’s expenditure on capital investment? (select all that apply)
 ☐ Current customer demand for this business’s products or services
 ☐ Future expected customer demand for this business’s products or services
 ☐ Access to businesses own funds
 ☐ Access to external finance
 ☐ Changes made to the Instant Asset Write-Off which included increased threshold and expanded eligibility
 ☐ Other Government support measures (including Boosting Cash Flow for Employers, Government backed-business loans, Backing business investment – accelerated depreciation)
 ☐ Uncertainty about the future state of the economy
 ☐ Investment made to modify the business in response to COVID-19
 ☐ Other factors (please specify)
  
 (b) Compared with 3 months ago, has the business’s actual and planned expenditure on capital investment increased, decreased, been cancelled, or remained unchanged?
 ☐ Increased
 ☐ Decreased
 ☐ Cancelled [End of survey]
 ☐ Remained unchanged
 ☐ Don't know
  
6(b)(i) If they remained unchanged, was this because the business did not, and still does not have any expenditure on capital investment?
 ☐ Yes, business did not, and still does not have any expenditure on capital investment [End of survey]
 ☐ No, business had expenditure on capital investment and this has not changed
  
 (c) Over the next 3 months, does the business intend to invest in any of the following? (select all that apply)
 ☐ IT hardware or software
 ☐ Registered road Vehicles (excluding heavy machinery (haul trucks, etc))
 ☐ Other equipment or machinery (e.g. office equipment, furniture assets, hand and power tools, forklifts, pumps)
 ☐ Buildings and other structures
 ☐ Other investments (please specify)

Data downloads

Business impacts of COVID-19, August 2020

Previous catalogue number

This release previously used catalogue number 5676.0.55.003.