ABS survey suggests Aussie business are feeling the pinch from COVID-19
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New data from the Australian Bureau of Statistics (ABS) indicates the disruption caused by COVID-19 has been pretty severe for Australian businesses.
The insights are based on a survey of 2,000 companies, carried out between June 10 and June 17 to provide a snapshot of how local companies are faring (1,431 companies responded).
Included was the admission by three in 10 small businesses (defined as companies with less than 20 staff) that they don’t have enough cash on hand available to support business operations for more than three months.
In addition, around two thirds (66 per cent) of all the companies surveyed reported a decline in revenue compared to the previous year. And of those companies, one in three reported a decline in revenue of more than 50 per cent.
While the stock market is still priced for an economic rebound, the ABS data provides an indication of the difficult conditions faced by Australian businesses on the ground in the wake of the pandemic.
In that context, the introduction of government support has been crucial in providing a lifeline through the worst of the disruption.
“Several businesses commented that existing cash on hand would not be sufficient to maintain operations if not for government support measures,” the ABS said.
Further rounds of poor economic data may serve to increased speculation about whether the government will offer to extend its JobKeeper support program, which is currently scheduled to end in September.
Earlier today, the Business Council of Australia (BCA) suggested that JobKeeper payments should be extended beyond September for specific industries that had been hardest hit by the crisis.
Calling the JobKeeper initiative an “enormous success”, BCA president Tim Reed told a Senate Select Committee that the government should engage in a “very targeted stepping down” of the program.
Speaking with Stockhead earlier this month, Pengana fund manager Ed Prendergast said the prospect of additional government stimulus could have a key bearing on the outlook for stocks in the event of a more entrenched economic slowdown.