Lifting restrictions needed to save businesses and jobs

Lifting restrictions needed to save businesses and jobs

Businesses confidence in Rockhampton increased in the September quarter, but the long-term outlook for business remains blurred by uncertainty, especially as stimulus support begins to taper off said the Chamber of Commerce and Industry Queensland (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 there was some recovery, the economy is stalled due to ongoing restrictions.

Key results in CQ show:

  • More than three-quarters of businesses reported that they had maintained or increased their capital expenditure to leverage investment incentives;
  • Despite an increase of sales and revenue in this September Quarter, the forecast index for sales and revenue, profitability and capital expenditure are expected to decline over the next three months; 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 further 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.

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