In terms of the impact of the pandemic on firms' revenue, the details in this survey showed improvement. In August, a lower percentage of firms (41%) reported that revenue had decreased over the past month compared with July (47%), while a larger share (38%) now said that revenue had stabilised than in the previous survey (32%). The share of firms reporting a revenue increase was unchanged from the previous survey at 16%. Looking ahead to September, the negative impact on revenue is expected to recede further to affect 28% of firms. For operating expenses, there was minimal change in August compared to July, while in September the broadening of the stabilisation is expected to continue. Another positive aspect was around employment, with a decreasing share of firms cutting back on staff, though the percentage of firms increasing employee numbers remains small.
Source: ABS
The survey also examined the ability of firms to meet upcoming financial commitments over the next 3 months. Almost 1 in 4 (23%) of respondents said it would be "easy" to "very easy" to meet upcoming financial commitments, 39% said it would be "neither easy nor difficult", while 35% indicated they expected it would be "difficult" to "very difficult". Focusing on the firms expecting difficulty in meeting upcoming financial commitments, as the chart below shows, this is unsurprisingly more likely to fall in the industries that have been hardest hit by the pandemic led by accommodation and food services (71%), transport (includes air travel), postal and warehousing (56%) and arts and recreation (48%).
Source: ABS
On capex, compared to 3 months earlier, 1 in 4 firms said that their level of spending had remained unchanged, while 23% reported that it had been lowered and only 12% reported an increase. The chart, below, indicates that the declines in actual or planned capex have been more prevalent in medium and large-sized firms.
Source: ABS
Giving greater context to the downgrades reported in investment plans in today's Q2 capex data, the August survey provided a summary of the factors that are most influencing firms' decisions in this area. The most significant factor being mentioned by firms was the uncertainty of future economic conditions (59%), followed by expectations for future demand (40%). More positively for capex plans, firms are factoring in the availability of government support measures, including the expanded instant asset write-off allowances. Specifically, in relation to the pandemic, 28% of firms said that capex plans had been altered over the past three months as a result of its emergence.
Source: ABS