Higher costs for over half of all businesses

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Released
28/04/2022
Source
Business Conditions and Sentiments, April 2022

More than half (57 per cent) of all businesses experienced increases in the cost of doing business over the three months to April 2022, with almost a quarter (21 per cent) reporting costs had increased to a great extent, according to data released today by the Australian Bureau of Statistics (ABS).

Consistent with the results from March, most of these businesses had seen increases to the cost of fuel or energy (83 per cent) and the cost of products or services used by the business (82 per cent).

ABS Head of Industry Statistics, John Shepherd, said: “More than half of the businesses with higher costs (52 per cent) did not increase their prices. For those that did increase prices, 42 per cent had partially passed on costs and 6 per cent had fully passed on the increases to customers.”

Businesses also provided information about other actions they had taken in response to increased business costs.

“Over a third (39 per cent) of businesses had made changes to their operations or processes and 17 per cent had renegotiated payment terms with customers and suppliers,” Mr Shepherd said.

Cost of doing business and actions taken.
Increased cost of doing business, passing on and actions taken 57% of businesses have had the cost of doing business increase more than usual over the last months (a). Extent to which increased costs have been passed on (b) - 6% Completely passed on, 42% Partially passed on and 52% Not passed on. Actions taken due to cost increases(b)(c) - 39% Made changes to business operations or processes, 17% Renegotiated payment terms with customers or suppliers, 16% Deferred or cancelled investment plans and 13% Sought additional funds. (a) Proportions are of all businesses. (b) Proportions are of businesses that reported the cost of doing business over the past three months increased to a small or great extent. (c) Businesses could select more than one response.

The results also provided information about business staffing levels. One in five businesses (18 per cent) did not have enough staff in April 2022, consistent with findings in January 2022.

More than four in five businesses (84 per cent) with staff shortages were unable to find suitable staff, rising from 69 per cent in January. Uncertainty due to COVID-19 was less likely to be an influence on staffing levels (36 per cent compared to 62 per cent in January).

Further information, as well as insights into supply chain, are included in Business Conditions and Sentiments.

Media notes

  • The data release from the Survey of Business Conditions & Sentiments provides insights into business expenses, staffing levels and supply chain disruptions.
  • The additional ABS products published to understand the economic impact of COVID-19 can be found on a dedicated page on the ABS website.
  • When reporting ABS data, the Australian Bureau of Statistics (or the ABS) must be attributed as the source.
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