The latest ABS Business Impacts of Covid-19 Survey for the month of October indicated that conditions were continuing to stabilise as Australia's economic recovery progresses. The previous survey for September reported that almost 2 in 3 businesses across the nation were operating in a modified way due to the pandemic, though the effects of this could be moderating as businesses become more accustomed to this new normal.
The October survey was based on a sample of 2,000 businesses (response rate was 63%). Since the July survey, businesses have been asked about the monthly change in their revenue, operating expenses and number of employees. Back in July in the early stages of the reopening, 47% of businesses reported a month-on-month fall in revenue but this had declined to 31% by October. Almost 1 in 2 businesses (49%) assessed revenue had held steady in October compared to 32% back in July. Interestingly, considering the easing in restrictions that has since occurred, the percentage of businesses reporting a rise in revenue in October (16%) is the same as it was in July, though forward-looking expectations have improved. The profile pertaining to operating expenses appears consistent with increased activity post reopening with a larger share of businesses reporting an increase or no change in costs than in July, while only 8% now said that costs had declined compared to 16% 3 months ago. With more activity coming back, 85% of businesses said employee numbers were stabilising (up from 80% in July) and the percentage of businesses reporting a decrease in employees had reduced to 7% in October from 13% in July.
The sequential improvement in conditions that has occurred the longer the reopening has gone on can be seen in businesses' expectations for month-ahead revenue. The share of businesses expecting revenue to increase in the coming month in October (18%) is the highest it has been over the cycle of the survey, and expectations for declines have reduced.
Across businesses of all sizes, the most common reason for needing additional funds was to support operating expenses as revenue fell in response to the restrictions that affected normal trading. Some business also used the funds for capital expenditure purposes, with investment made in new equipment and machinery to allow them to operate under modified conditions, such as a shift away from face to face delivery of goods and services to home or online delivery.