Business Indicators, Business Impacts of COVID-19

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, past month and next month;
• Support measures used by businesses and expected actions when they are no longer available;
• Workforce difficulties experienced by employing businesses.
   

The collection was conducted through a telephone survey between 15 July and 23 July 2020. The sample size was 2,000 businesses and the final response rate was 50% (997 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.

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

Almost half of all businesses (47%) reported that revenue had decreased in the previous month. For the next month, 27% expected revenue to decrease and 49% expected revenue to stay the same.

Four in five businesses (80%) reported no change in the number of employees over the previous month and five in six (85%) expected no change next month. Fewer businesses expected a decrease in the number of employees next month (3%), compared to those that reported a decrease over the previous month (13%).

Businesses operating under modified conditions were almost three times as likely to expect a decrease in revenue next month compared to businesses operating as normal (32% compared to 11%).

Large businesses (i.e. 200 or more persons employed) were twice as likely to report a decrease in the number of employees over the last month compared to small businesses (i.e. 0-19 persons employed) (26% compared to 13%). Large and medium (i.e. 20-199 persons employed) businesses were more likely to report an expected decrease in the number of employees next month compared to small businesses (10% and 13% compared to 2%).

Data was collected via a telephone interview. Additional insights into drivers for changes within businesses were provided as comments by respondents.

A number of businesses reporting a change in revenue commented that there were minor differences between the reporting period and the previous month, but significant differences compared to the same time last year. Some businesses noted that the seasonal nature of their business impacted on monthly variations in revenue.

Multiple businesses commented that their operating expenses had increased due to requirements around cleaning and hygiene, namely obtaining cleaning products and personal protective equipment (PPE). In contrast, some businesses indicated that increased working from home arrangements had decreased their operating costs.

Many businesses commented that their expected revenue and operating expenses were heavily dependent on whether government regulations would be changing again or staying the same, specifically those regarding social distancing and travel.

Commencing from 28 April 2020, the Australian Government provided temporary cash flow support to businesses and not-for-profit organisations that employ staff. More information on the measure, including eligibility, can be found in the Australian Government’s fact sheet and on the Australian Tax Office website.

Businesses were asked whether they were aware of the Boosting Cash Flow for Employers measure, whether they had received support from the measure and if so, what the funds had been used for. Businesses that had not received support reported reasons why this was the case.
 

1. Proportions are of all businesses; including businesses that may not be eligible for support
2. The sum of the component items do not equal 100% due to rounding
3. Survey respondents indicated they were not aware of the Boosting Cash Flow for Employers measure or were not sure if the businesses had received it
4. Survey respondents could provide more than one response to the question
5. Proportions are of businesses that received support from the Boosting Cash Flow for Employers measure
6. Proportions are of businesses that did not receive support from the Boosting Cash Flow for Employers measure
    

More than half of all businesses (54%) reported that they have received support from the Boosting Cash Flow for Employers measure. Businesses that received a cash flow boost most commonly used it to support employees (i.e. pay wages/salaries) (61%) and to pay fixed costs (56%).

For the 20% of businesses that reported they had not received support from the Boosting Cash Flow for Employers measure, the most common reason given was that the business was not eligible (69%).

By employment size, the proportion of businesses that reported they had received support from the Boosting Cash Flow for Employers measure were:

• 54% of small businesses (i.e. 0-19 persons employed)
• 63% of medium sized businesses (i.e. 20-199 persons employed)
• 21% of large businesses (i.e. 200 or more persons employed)
   

1. Proportions are of businesses that received support from the Boosting Cash Flow for Employers measure
2. Businesses could provide more than one response to the question
3. For example, paying wages or salaries
    

Two in five (42%) businesses reported they were currently accessing available business support measures such as wage subsidies, deferring loan repayments or renegotiating rent or lease arrangements.

By employment size, the proportion of all businesses that reported they were currently accessing available business support measures were:

• 42% of small businesses
• 53% of medium businesses
• 38% of large businesses
   

Businesses operating under modified conditions (e.g. changes to products and services and how they are provided to customers, workforce changes, new hygiene protocols, changes to suppliers and limiting occupancy) were more than twice as likely to report they were accessing business support measures compared to those operating as normal (51% compared to 20%).

Businesses also provided information on actions they expect to take when the support measures are no longer available.

1. Proportions are of all businesses
2. Businesses could provide more than one response to the question
3. For example, stock or raw materials

Employing businesses provided information on workforce difficulties they were experiencing in relation to:

• Filling job vacancies;
• Meeting sufficient staffing levels with existing employees (including those on leave) and the main barriers in doing so; and
• Negotiating work arrangements with existing employees, such as hours of work, additional/less shifts, working from home.
   

Medium businesses (i.e. 20-199 persons employed) were almost twice as likely to experience difficulties in finding staff to fill job vacancies compared to small (i.e. 0-19 persons employed); 19% compared to 11% of small businesses. Medium businesses were also the most likely to experience difficulties in meeting staffing levels with existing employees.

The 9% of employing businesses that reported experiencing difficulties in meeting sufficient staffing levels were asked to provide additional information on the barriers that contributed to these difficulties. The following is an image of the key themes reported by these businesses. More common responses are bigger, bolder and repeated in the image.

All employing businesses were asked if they had experienced difficulties negotiating work arrangements with employees in relation to hours, rates of pay, changes in duties and work location.

Approximately three in ten employing businesses (31%) reported they had experienced one or more issues in negotiating work arrangements with employees.

1. Proportions are of all employing businesses
2. Businesses could provide more than one response to the question