The Australian Bureau of Statistics – ABS – has released figures that say fewer businesses are reporting drops in revenue due to the coronavirus pandemic, signaling a significant recovery for a number of businesses around Australia.
The ABS says that fewer businesses reported a revenue decrease in October, which stood at 31% of businesses, compared to 47% reporting revenue drops back in July. Figures from the ABS show that 73% of businesses did not need to access additional funding to survive over the past six months.
Just under a third of businesses (29%) reported that they had enough cash on hand to sustain their operations for the next three months. Specific to the month of October, 7% of businesses responded that they had recorded a drop in revenue, which stood at 13% in July.
The ABS also mapped out loan deferrals by businesses around Australia, which provides a relatively good picture of a steady business recovery. In the month of May, 16% of businesses responded they were deferring their loan repayments to ensure they can continue to operate. In October, this figure dropped to just 7%.
According to the figures, medium-sized businesses were twice as likely to report they were deferring the repayment of loans than small and large businesses; 13% for medium-sized businesses compared to 7% for small and large businesses.
The top three industries most likely to defer their loan repayments in October are the accommodation and food services (31%), wholesale trade (21%) and manufacturing industries (16%).
Head of Industry Statistics at the ABS, John Shepherd has said that “more than four in five (83%) of businesses that did not seek additional funds said it was because the funds they had were sufficient and around half (49%) did not want to increase debt.”
“For the 21 per cent of businesses that sought additional funds, the most common purpose was to cover operating costs (72%),” he said.
The ABS says its research took into account data from small businesses – with zero to 19 employees – medium businesses – anywhere between 20 and 199 employees – as well as large businesses with more than 200 employees on their books.
When broken down by size, the ABS says that in five medium-sized businesses (22%) recorded an increase in employees on their books, with 19% of large businesses responding they had hired extra staff in the previous months.
The figure for small businesses hiring staff, however, remained low at just 6%.
The ABS says that accommodation, food services and businesses operating in the hospitality industry were most likely to look for additional funds and support in the month of October, with 35% of the industry responding they needed extra support, and 7% of the arts and recreation industry responding they needed extra cash.
When asked what these funds would be used for, 72% of businesses responded that any extra resources would be used to cover their operating expenses to comfortably operate over the next few months.
The top five industries most likely to require extra financial support in the month of October goes as follows: Accommodation and Food Services, Education and Training, Transport, Postal and Warehousing, Healthcare and social assistance and Information Media and Telecommunications industries.