Suncorp’s latest survey of Queensland businesses shows the dire economic impacts of COVID-19 restrictions during the June quarter.
The Pulse Survey, compiled by the Chamber of Commerce and Industry Queensland and Suncorp, measures business sentiment among the state’s 438,000 SMEs.
While the findings showed a slight improvement on the March quarter, business performance remains poor. Where there were improvements, these were largely due to an easing of restrictions, were building from a very low base and remained historically low.
Two thirds of businesses surveyed reported their sales revenue had fallen during the quarter and a further two thirds said their profitability had declined.
Shockingly, 54% of businesses said they were concerned they could not remain operational beyond 12 months, following the end of government stimulus measures.
The restrictions first introduced on March 18 continued to impact both business conditions and trading. While trading did begin to lift with the easing of restrictions in mid-May, this was up from the lowest base in the survey’s history and remains lower than those seen during the global financial crisis.
However Suncorp said the levels would be significantly worse if not for the government’s stimulus measures such as JobKeeper, which has kept many businesses afloat and aided consumer spending.
Of businesses surveyed, just under three quarters (74%) anticipate both the Queensland and national economies will deteriorate inn the next 12 months.
The report’s Pulse Index for Queensland’s 12-month economic outlook put the number at 25, which is down considerably on the 10-year average of 45.3 and down 2.7 points on December 2008 during the GFC. Nationally, the reading was 25.4, down on the national 10-year average of 47.5.
The survey’s General Business Conditions Index was up 2.8 points in the quarter, rising to 30.4, which is 14.8 points below the ten-year average and reflects the difficult trading conditions.
This was further indicated by the Sales and Revenue Index, which was up by just one point for the quarter and remains 18.1 points below the ten year average and 11.2 points below the historic low seen during the GFC.
CCIQ economist Jack Baxter said that figures were the second-worst results on record on almost every indicator included in the survey.
“The majority of businesses are experiencing a downturn in their turnover and profitability, which is impacting all areas of their operations, including hiring intentions, capital investment and general productivity,” Mr Baxter said.
“Despite ongoing uncertainty, there has been an improvement in business sentiment surrounding the performance of Queensland’s economy, rising 11.9 points from March. This is credited to stimulus support, the easing of restrictions and anticipation of the border reopening.”
Suncorp Bank Head of Business Customers, John Debenham said retail, tourism and hospitality were continuing to experience hardship.
“We would encourage those business that are concerned to discuss with their bank or broker some of the options to help get them through this challenging time. Having this conversation early is the best approach and can help businesses navigate the uncertainty we are facing,” Mr Debenham said.