CommBank: Steeper business activity declines in April

COVID-19 shutdowns haven’t been kind to Australian businesses, with new figures from the Commonwealth Bank revealing the extent of the fallout has only grown with time. 

The latest CommBank ‘Flash’ Purchasing Managers Index (PMI) recorded an even steeper drop in private business activity this month compared to the last, as a result of coronavirus

In April, the headline Flash PMI dropped to 22.4, down from 39.4 in March. For context, any reading below 50 indicates a decline in activity on the previous month. 

CommBank’s Head of Australian Economics, Gareth Aird said the results aren’t a shock given that businesses across the nation have closed their doors while customer demand both locally and internationally have also shrunk. 

“The collapse in the headline Flash PMI index for April reflects the severe contraction in economic activity currently taking place due the coronavirus,” he said. 

This data comes just days after Reserve Bank Governor Phillip Lowe’s forecast that Australia could experience the biggest contraction in national output and income since the 1930s

Services take the biggest blow 

This month, the services sector copped the worst of the coronavirus crisis, with its PMI index sliding to a low 19.6, down significantly from 38.5 in March. Service providers lowered their prices, as input costs fell with reduced wages and plummeting fuel prices. 

The manufacturing PMI index also tumbled, although to a lesser degree, sitting at 45.6 in April, compared to March’s 49.7. 

“The services sector has been hit a lot harder than the manufacturing sector. And the pace of job shedding is concerning though not surprising given the large number of Australian businesses that remain shut,” Aird said. 

Despite a nosedive in confidence, companies have expressed hope that business would return to normal over the coming year. 

But Arid said their ability to bounce back will “be dictated in large part by the duration of the enforced shutdown and also by the success of efforts to eliminate the spread of the virus.” 

COVID-19 relief options for businesses

If you’re a small business struggling to stay afloat, here are a couple of options to keep in mind: 

  • Ask your bank for help: Several lenders have stepped up with initiatives to help affected small businesses, including deferred repayments and waived fees. Even if your bank hasn’t made any official COVID-19 announcements, they should have a financial hardship policy in place, so it’s worth reaching out to get the support you need.
  • Join the SME Loan Guarantee Scheme: If you’re after extra working capital to get through tough times, then this route may be your best bet. Under the new SME Loan Guarantee scheme which runs until 30 September, the federal government will guarantee 50% of all three-year unsecured business loans of up to $250,000 issued by eligible lenders.

For a more comprehensive list of assistance options, check out our guide to Australia’s coronavirus financial support for small businesses.

Business loans 2020 - rates updated daily

Search promoted business loans below or do a full Mozo database search. Advertiser disclosure.

Refine the list of business loans

Let’s help find you a great business loan...
  • Featured Product
    Line of Credit

    Zip Business Loans online application process can be completed in as little as five minutes, and once approved you can access the funds within 24 hours. A line of credit up to $500k that converts into a loan when you draw down. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    2% to 3%
    Instantly, once approved
    Go to site
    Details
  • Business Loan

    Say goodbye to lengthy applications with online lender Moula. With a speedy 10 minute application process and potential funding within 24 hours, Moula can help you meet your businesses inventory or cash flow needs without the fuss. Participating lender in the SME government guarantee scheme.

    Interest Rate
    Upfront Fee
    Funding speed
    from 15.00% p.a.
    2.00%
    24 Hours
    Go to site
    Details
  • Unsecured Small Business Loan

    Fast, unsecured business loans approved within 24hrs. Access funds up to $300k for any business purpose with no application fees, minimal paperwork and funds in your account quickly so you can focus on growing your business.

    Interest Rate
    Upfront Fee
    Funding speed
    from 10.99% p.a.
    3% establishment fee
    24 hours
    Go to site
    Details
  • Unsecured Business Loan

    A straight forward business loan with no hidden fees or charges. Achieve business goals through having fast, easy access to finance to give your business the boost it needs.

    Interest Rate
    Upfront Fee
    Funding speed
    from 16%
    $0.00
    Within same day
    Go to site
    Details
  • Unsecured Business Loan

    Business Loans from $5,000 to $600,000 with high approval rates. Access to funds in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Go to site
    Details

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.