Monday, 3 August 2020
Business confidence in South Australia has rebounded after falling to its lowest level in history last quarter.
Defying ongoing uncertainty around COVID-19, business confidence increased 26 points from a historic rock bottom of 41 up to 67.0 for the June quarter.
The South Australian Business Chamber Director of Policy and Advocacy, Andrew McKenna, said the results from the June quarter of the South Australian Business Chamber – William Buck Survey of Business Expectations offered a glimmer of hope for the State’s economic recovery.
“The tide has turned in the June quarter with the business community much more positive about the road ahead than first forecast,” said Mr McKenna.
“With majority of businesses still impacted by trading restrictions during the quarter, the increase, the largest in 13 years, is significant and signals a hint of optimism in the air.
“Revenue also started to swing with those businesses down by 50 per cent or more in the June quarter (22%) halving from the March quarter figures (43%).
“The General Business Conditions Index also stabilised, despite businesses predicting it would plummet further back in March. While the outlook for next quarter is even better with the index expected to jump almost 14 points to back above 80.
“While the full impact of the deadly second wave in Victoria had not fully emerged at the time of the survey period in early to mid-July, it is still clear businesses owners are feeling more confident of surviving current restrictions in South Australia.
“Amid mass uncertainty in the March quarter, 36 per cent of businesses cast doubt on surviving another three months however but June is much more encouraging with 81 per cent of SMEs now confident of surviving current restrictions for a further six months or longer.”
Mr McKenna said the results could have been far worse if not for the JobKeeper scheme.
“JobKeeper is stemming a flood of job losses in South Australia,” he said.
“According to the survey, 65 per cent of respondents are receiving the wage subsidy while 60.2 per cent said of those on the scheme said it had allowed them to maintain pre-COVID-19 staffing levels which underscores the critical importance for it to continue.”
William Buck Managing Director, Jamie McKeough, said thankfully conditions had settled in SA.
“Business confidence and conditions have bounced back in the June quarter and the depths of despair anticipated back in March, fortunately, have not materialised,” he said.
“Businesses are slowly getting back to normal with 46 per cent bringing their staff back into the office. Interestingly, it appears working from home will be the exception not the norm moving forward with majority of respondents reporting work from home arrangements would continue however, on an ad hoc basis rather than a mass migration.
“Once again we saw in the June quarter COVID-19 push business growth aspirations on the back burner with 35 per cent feeling the need to revise or update their 3 – 5‑year business strategies to cope with the crisis.”
Read the Survey of Business Expectations ‘Business Now’ Report
