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SA small businesses most worried as pessimism grows

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
19 May 2020 1 minute readShare

South Australian small and medium-sized businesses have emerged as the most pessimistic during the coronavirus crisis, with one in two reporting they are not confident in their survival prospects.

While just under half of all small businesses in the ACT voiced their hope for a post-COVID-19 future, only 26.9 per cent of South Australian businesses reported their confidence, data from the Sensis Business Index revealed.

With many Australian small businesses kicking off the year stressed by the bushfire devastation and everyday cost pressures, the unprecedented coronavirus crisis appears to have taken a further swipe at business confidence, with Sensis data revealing a massive drop in just two weeks as the reality of the pandemic hit Australia mid-March.

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“Australia’s small businesses were feeling the squeeze before the impact of the coronavirus hit,” said Sensis CEO John Allan. “But the massive fall in confidence in just a matter of 14 days, while not a surprise, was the fastest drop in the 25-year history of the survey.”

Namely, according to Sensis, confidence fell from +40 on 10 March to -13 on 24 March.

 

Asked about the impact of COVID-19 on their business, as time progressed the stark reality of the crisis hit businesses quickly, with sentiment changing mid-survey. At the start of March, 29.7 per cent of SMBs had seen no impact on their business, but by the third week of March, 32 per cent had seen a severe impact, 35 per cent had seen some impact and 26 per cent were expecting an impact.

“The extraordinary speed of the change in confidence is not something we’ve ever witnessed before; it was as if a speed train had hit the majority of small-medium businesses in Australia, with 47 per cent surveyed now worried about the future,” Mr Allan said.

Sensis also revealed small businesses across the country were not confident about the economy going into lockdown, with 64 per cent opining the economy had contracted and 30 per cent believing it had stalled.

However, despite the lockdown, small businesses were showing resilience.

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“More than one-third (34 per cent) of small businesses were showing resilience and still confident about the future, suggesting they are hopeful about a quick bounce-back post-lockdown,” Mr Allan noted.

“ACT small businesses were the most confident (47.3 per cent were confident) while South Australian SMBs were the most pessimistic (52.3 per cent not confident).”

Asked to rank their state and territory economies, 57 per cent of SMBs told Sensis their state economy was shrinking, while 35 per cent believed it was at a standstill. South Australian SMBs were most pessimistic again, with 67 per cent feeling the SA economy was moving downhill.

The Sensis Business Index is based on 1,015 online interviews conducted between 4 and 28 March 2020 with small and medium business proprietors or managers employing up to 199 people.

SA small businesses most worried as pessimism grows
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has an extensive career as a journalist across finance, business and market intelligence. Prior to joining Momentum Media, Maja spent several years unravelling social, political and economic intricacies in Eastern Europe. 

You can email Maja on [email protected] 

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