Although it is still more than four months away, nearly one in three small businesses (29%) say that when the Federal Government’s JobKeeper program finishes at the end of March it will have a major impact on their business.
According to the November Sensis Business Index, the impact of end of jobkeeper will be felt greater in metropolitan areas with 35% saying it will have a major impact compared with just 14% in regional areas.
Sensis CEO John Allan said the biggest impact will be felt in Victoria and Queensland. “35% of small businesses in those two states said the loss of JobKeeper would have a major impact. We were expecting Victorian businesses to take a hit but were surprised that Queenslanders also expect to be badly affected,” he said.
The Sensis survey is of 500 business owners/managers across all states and across 10 business sectors. It was conducted by data insights platform Glow in the first weeks of November. 25% of the businesses survey had 50 employees or more and 59% of businesses had been operating for more than 10 years.
“The sector expecting the biggest impact at the loss of JobKeeper is the Wholesale sector – so those businesses that keep Australia’s small businesses supplied. 42% said it would have a major impact, followed by Manufacturing at 40% and Retail at 32%.”
The Hospitality sector again showed its resilience with just 22% saying it would have a major impact. Construction believes it will be least impacted at just 12%.
53% of all businesses said the loss of JobKeeper would have a moderate effect with nearly one in five (18%) saying it end of jobkeeper will make no difference. 27% of Queensland businesses said it would have no impact followed by Tasmania and the ACT at 25%. 22% of businesses in Hospitality and 11% in Retail said it would make no difference.
An estimated 3.5 million Australians have been paid JobKeeper, equivalent to one in four workers.
Sales under Covid-19
Since the pandemic started 13% of Victorian businesses have lost more than 80% of their sales. 26% have lost 50% or more. Overall, 15% of businesses reported having lost 50% or more in sales.
However, for 20% of businesses there has been no change to sales with 29% increasing sales by 10% or more – again showing how two-paced the economy is.
How long take your business to recover to pre Covid-19 levels?
Already nearly one-third of Australian businesses (30%) say their business is back to its pre Covid-19 levels with a further 12% reporting that they are well ahead.
“Of course not all are doing well,” said Mr Allan. “14% surveyed said it will take them three months to return to pre Covid-19 levels, 15% will take six months, 14% will take 12 months and 14% more than a year.
“Regional businesses are doing slightly better than their city counterparts with 15% of regional businesses saying they were well ahead compared to 11% in metropolitan areas.”
The Tasmanian economy is doing well with 21% of businesses on the Apple Isle saying they are well ahead from pre Covid-19 with Western Australia and Queensland at 15%. As expected, Victoria was at just 7% and NSW at 11%.
Victoria also lagged in the back to pre Covid levels with just 21% of businesses in that position – the lowest of any state. The ACT was doing the best at 41% followed by South Australia at 36%, Queensland at 35% and Western Australia at 31%.
The 14% of businesses that say it will be more than a year to get back to pre Covid-19 levels saw the figure rise to 16% in Queensland, South Australia and Tasmania, 15% in Western Australia, 14% in Victoria, 10% in NSW and 5% in the ACT.
18% of Manufacturing businesses said they were well ahead of pre Covid-19 levels, with Wholesale at 17% and Retail and Transport both at 16%.
52% of Health and Community businesses are back to pre Covid-19 levels, with 44% in Finance and Insurance and 33% in Construction. Surprisingly, 20% of Hospitality businesses said they were back to pre Covid levels but 23% said they would not get to those levels for more than a year. Cultural and Recreational was also at 23% with Retail, Transport and manufacturing all at 16%.