Optimism among Australian businesses remains weak amid COVID-19, with new research showing nearly 3 in 4 don’t expect the economy to fare well over the coming year.
The latest Roy Morgan Business Confidence poll, based on 1,191 detailed interviews, found business confidence during April dropped to a record low for the second month running.
On the Roy Morgan index, confidence fell by 19% to 76.9 points.
In April, more Aussie businesses (65%) said they were in a worse financial position now than this time last year.
And they didn't feel reassured about the future either. Almost half of respondents saw 2021 as a bad time to invest in business growth, compared to just one-third who thought the opposite.
Looking further ahead, the report also recorded a rise in the number of businesses who believed the Australian economy won’t recover any time soon. Over half of respondents expected its poor performance to continue over the next five years.
This plunge in confidence came as stringent social distancing measures introduced by federal and state governments were in place throughout April.
Such measures have drastically affected business operations, with recent Commbank research showing they caused an even sharper decline in business activity over April than the month prior.
Three-stage plan: A ray of hope ahead
Despite these findings, the Roy Morgan report hinted there is light at the end of the tunnel.
Notably, business confidence began to climb back up halfway through April, amid news of the curve flattening and the Morrison Government proposing a three-stage plan out of coronavirus lockdowns.
As Roy Morgan’s chief executive, Michele Levine explained, “[the] good news is business confidence bottomed in the first half of the month and has since improved.”
During the second half of April, confidence averaged 82.0 - up from 69.3 in the first two weeks.
Levine added that Aussie businesses last month also felt more certain they could get ahead of the downturn.
"Perhaps surprisingly, Australian businesses were growing more confident in April about their own prospects, with 43% [of respondents] expecting the business to be ‘better off financially’ this time next year - up 3.6 ppts from March,” she said.
Next steps for your business
With the first set of restrictions set to lift over the coming weeks (timing will depend on the state), some businesses are preparing to reopen.
Under step one of Morrison’s plan, cafes and restaurants will be allowed to seat 10 patrons at a time, given that they abide by the four square metres per person rule. Retail stores will also open, along with hairdressers and barber shops which must record their customers’ contact details.
Step two will involve double the numbers of patrons allowed in cafes and restaurants. A host of other businesses will also be permitted to open with up to 20 customers at a time, including cinemas, indoor gyms, galleries, massage and beauty therapy clinics and tattoo parlours.
Step three will see the maximum gathering size increase to 100.
If you’re looking for extra finance to help kickstart operations again and get your enterprise back on its feet, a business loan could help.
Right now, you can snatch up a competitive deal, thanks to the series of business loan rate reductions following the March RBA emergency rate cut.
Securing additional working capital should also be easier under the government’s SME Loan Guarantee Scheme, which guarantees 50% of all eligible unsecured loans of up to $250,000 and will run until 30 September.
Interested in taking out a business loan today? Get started with these options below.
Page last updated October 26, 2020
Compare business loans - rates updated dailyMozo has robust processes to ensure our site is updated to reflect the latest information from providers. There may be the odd occasion where updates are delayed, so please confirm information before purchasing.
Selective Invoice FinanceDetails
For more tips, check out our article on money moves to help your business survive coronavirus.
^See information about the Mozo Experts Choice Business Loans Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.