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Business Indicators, Business Impacts of COVID-19

Insights into Australian business conditions and sentiments.

Reference period
October 2020
Released
22/10/2020

Key statistics

  • Fewer businesses reported a revenue decrease in October (31%) compared to July (47%).
  • Almost three quarters (73%) of businesses had not sought additional funds over the last 6 months.
  • Almost one third (29%) reported that cash on hand could sustain operations for less than three months.

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.

Revenue, 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.

This information has been collected each month from July 2020.

Month on month, the proportion of businesses reporting a decrease in revenue has fallen, from 47% in July to 31% in October.

In October, 7% of businesses reported a decrease in the number of employees. This compares to 13% in July.

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(a) Proportions are of all businesses

Approximately one in five medium (22%) and large (19%) businesses reported an increase in the number of employees, compared with 6% of small businesses.

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(a) Proportions are of all businesses

Expectations for revenue, expenses and employment

Each month businesses are asked to report on their expectations relating to revenue, operating expenses and number of employees over the next month.

 

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(a) Proportions are of all businesses

In comparing these monthly expectations provided between July and October, those relating to operating expenses and number of employees have remained stable.  A larger proportion of businesses reported an expected increase in revenue for October and November compared to August and September.

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(a) Proportions are of all businesses

Cash on hand

Businesses were asked to estimate the length of time that operations could be sustained by currently available cash on hand. 

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

In October, businesses estimated that the length of time cash on hand could sustain business operations was:

  • Less than 1 month (8% of all businesses)
  • 1 to less than 3 months (21%)
  • 3 to less than 6 months (13%)
  • 6 months or more (38%)
  • Don’t know (19%)

These results were similar to those seen in June.

Funds sought by businesses

One in five of businesses (21%) reported they sought additional funds over the past six months.

By employment size, the proportion of businesses that sought additional funds were:

  • Small businesses (21%);
  • Medium businesses (27%); and
  • Large businesses (24%).

Businesses in Accommodation and food services were the most likely to have sought additional funds (35%), while businesses in Arts and recreation services were the least likely (7%).

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Purpose of additional funds sought

Businesses that reported they sought additional funds also provided reasons for seeking funds. Almost three quarters (72%) of all businesses reported they sought additional funds to cover operating expenses.

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(a) Proportions are of businesses that sought additional funds

(b) Businesses could provide more than one response

Reasons for not seeking additional funds

Almost three quarters (73%) of businesses did not seek additional funds over the past six months. These businesses reported on reasons for not seeking funds.

Businesses that had not sought additional funds, by reasons for not seeking funds (a)(b)

Businesses that had not sought additional funds, by reasons for not seeking funds. The proportions were:83% had sufficient funds, 49% did not want to increase debt, 47% had no capital expenditure requirements, 45% had no other investment requirements, 13% expect to be declined, and 11% could not meet repayments

Businesses that had not sought additional funds, by reasons for not seeking funds (a)(b)

This bubble graph image shows the proportions of businesses that had not sought additional funds, by reasons for not seeking funds:
83% had sufficient funds,
49% did not want to increase debt,
47% had no capital expenditure requirements,
45% had no other investment requirements,
13% expect to be declined, and
11% could not meet repayments

(a) Proportions are of businesses that had sought additional funds

(b) Businesses could provide more than one response

Loan repayment deferrals

In October, 7% of businesses reported they were deferring loan repayments. This compares with 16% of businesses in May.

Medium businesses were almost twice as likely as small and large businesses to report they were deferring loan repayments (13% compared with 7% and 7%).

Businesses in the following industries were most likely to report they were deferring loan repayments:

  • Accommodation and food services (31%); 
  • Wholesale trade (21%); and
  • Manufacturing (16%).

Reasons for deferring loan repayments

Businesses provided additional comments on the reasons for deferring loan repayments. The following is an image of the key themes reported by these businesses. More common responses are bigger and bolder.

Additional comments on the reasons why businesses are deferring loan repayments
This is a word cloud image of the key themes reported by businesses as to why they are deferring loan repayments. The approximate order of words in the cloud from biggest to smallest is reduced cash flow, not enough money, keep trading, reduced turnover, pay bills, uncertainty, keep cash in the bank, business was eligible, to reduce expenses and savings.

Business impacts of COVID-19 visual summary

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Business impacts visual summary - October 2020

Infographic of Business Impacts of COVID-19

Business impacts visual summary - October 2020

The below describes the infographic

Headline: Business Impacts of COVID-19 Survey results - October 2020

Fewer businesses reported a decrease in revenue with 47% reporting a decrease in July compared to 31% in October.

Business reported that the length of time cash on hand could sustain operations was:
Less than 1 month (8% of all businesses)
1 to 3 months (21%)
3 to 6 months (13%)
6 months or more (38%)
Don't know (19%)

1 in 5 businesses have sought additional funds in the last 6 months.
The industry most likely to seek funds was Accommodation and Food (35%) and the least likely was Arts and Recreation (7%)

Of the businesses that did not seek additional funds 83% had sufficient funds and 49% did not want to increase debt

Results from the Business Impacts of COVID-19 Survey.
Detailed data on the impacts of COVID-19 can be found at abs.gov.au/covid19

Data downloads

Business Impacts of COVID-19, October 2020

Previous catalogue number

This release previously used catalogue number 5676.0.55.003