Lifting restrictions needed to save businesses and jobs: CCIQ
The latest Suncorp-CCIQ Pulse Survey of Business Conditions, a quarterly survey conducted to give a snapshot of business conditions in Queensland, found that while the momentum of recovery continued, the economy is stalled due to ongoing restrictions.
- One in four business are experiencing improved business conditions compared to the June quarter;
- One in three businesses indicated an increase in sales and revenue;
- One-half of businesses are still experiencing a decline in their profitability; and
- Nearly all surveyed businesses (99%) believe they could only survive up to 12 months when stimulus support ends.
CCIQ economist Jack Baxter said that while overall business sentiment increased from the previous quarter, the forecasted trends are plateauing well short of a full recovery.
“The results of the latest survey show businesses feel the recovery being experienced to date will be as good as it gets if there are no changes to current operating conditions,” Mr Baxter said.
“Many small businesses are still experiencing a stimulus-driven recovery in sales and revenue, but ongoing restrictions are constraining their ability to manage costs and boost profitability.
“One-half of respondents indicated their profitability continues to decline, despite a sharp improvement being recorded across the performance and cost indicators as business re-open.
“This indicates that despite being open and trading, social distancing and patron limits put a cap on profitability and economic productivity.
“And despite that decreased profitability, the crisis has not impacted their fixed operating costs. There’s still utility bills, rent and insurance to pay with deferred payments becoming due in the New Year.
“The concern for business is being expected to operate in these same conditions, with the same caps on their profitability, but without stimulus support. And that leads to no room for ongoing recovery,” Mr Baxter said.
Mr Baxter flagged that the September quarter’s Hot Topic Survey raised the most concern, with nearly all Queensland businesses now uncertain about their survival during the New Year as stimulus support ends.
“When stimulus support ends, and when loan repayments, deferrals and tax breaks resume, businesses must be standing on their own two feet.
“This is unlikely, as ninety-nine per cent of businesses indicating they are unsure of their ability to operate beyond 12-months without support, especially if current restrictions are not lifted,” Mr Baxter said.
CCIQ’s general manager of advocacy and policy said the September Quarter Pulse survey shows it’s now critical for restrictions on businesses to be eased.
“While it is positive to see sentiment improving slightly this quarter, our economy needs to see it increase further and it can happen by easing restrictions further,” Ms Rohan said.
“There are thousands of businesses still struggling, and they are worth billions to our economy.
“We’ve been calling for months to have restrictions eased further because enabling business to open up, while still operating in a COVIDsafe way will allow them to trade profitability.
“Additionally, this election we’ve called on all parties to commit to priorities that will support recovery but most importantly put the policy settings in place that will generate the demand required to transform, diversify and lift resilience of our businesses and communities in the short, mid and long term.
“Both the major parties have committed to working with CCIQ to progress our policy priorities for small business.
“What’s going to be most crucial in the months to come is the speed at which the next elected state government will deliver on their commitments.
“The fact is businesses need to be profitable. Because if they aren’t, they can’t keep their staff in jobs and they can’t keep their businesses operating. And when businesses close, people lose their jobs and our communities takes a hit.
“Queensland has the highest unemployment rate in the nation, the highest rate of business insolvencies and sluggish economic demand.
“The Christmas season is crucial for businesses, and we need to give them a real opportunity to fully open up and trade viably, so they can stay open and keep their staff employed,” Ms Rohan said.
Suncorp Executive General Manager Business Banking Glenn Haslam said businesses have had a challenging year however it’s pleasing to see that for the majority, business confidence is returning as restrictions ease.
“Whether it’s a cotton farmer in regional Queensland or restaurant owner on the Gold Coast, businesses across Queensland have shown their spirit and determination by adapting to meet their customers’ needs and changed circumstances this year,” Mr Haslam said.
“Although there is still a long way to go, as always Suncorp is there to help our customers get through these difficult times.”
ENDS
About the PULSE Survey
The Pulse Survey has measured Queensland business confidence and expectations quarterly for over 20 years. It is unchallenged in terms of being the most authoritative, timely and comprehensive snapshot of Queensland business sentiment providing critical insights into the opinions of business owners across the State. The Survey contains data from a sample covering the entire range of the business community.
The survey period was from the 1st to 15th of July 2020 and examines business sentiment and activity throughout the June quarter 2020. 1,167 participants responded to the Survey.
What is the Pulse Business Index?
The Pulse Business Index (PBI) is Queensland’s most authoritative, timely and comprehensive snapshot of business sentiment. The PBI works by utilising the quantitative responses from businesses to questions surrounding the forward outlook for the state and national economy, and key performance indicators. A PBI reading of 50 would indicate that performance growth has remained neutral. On the other hand, a PBI reading above or below 50 would suggest that performance across the indicator has grown or fallen, respectively. The following scale is useful in interpreting the performance of the PBI indicator:
Very Weak: 0-20
Weak: 21-40
Satisfactory: 41-60
Strong: 61-80
Very Strong: 81-100
ENDS
The Pulse Business Index (PBI) is Queensland’s most authoritative, timely and comprehensive snapshot of business sentiment. The PBI works by utilising the quantitative responses from businesses to questions surrounding the forward outlook for the state and national economy, and key performance indicators. A PBI reading of 50 would indicate that performance growth has remained neutral. On the other hand, a PBI reading above or below 50 would suggest that performance across the indicator has grown or fallen, respectively. The following scale is useful in interpreting the performance of the PBI indicator:
Very Weak: 0-20
Weak: 21-40
Satisfactory: 41-60
Strong: 61-80
Very Strong: 81-100
ENDS