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Business Indicators, Business Impacts of COVID-19

Insights into the prevalence and nature of impacts from COVID-19 on businesses operating in Australia

Reference period
April 2020
Released
4/05/2020

Key statistics

  • 44% of businesses reported the announcement of the JobKeeper Payment scheme influenced their decision to continue to employ staff.
  • 61% of businesses reported having registered or intending to register for the JobKeeper Payment scheme.

Business impacts of COVID-19 survey

This publication provides information on the incidence and nature of impacts due to COVID-19, as experienced by businesses operating in Australia. The survey was conducted between 22 April and 28 April 2020.

Topics covered in this release include:

  • Business response to the JobKeeper Payment scheme;
  • Anticipated adverse business impacts due to COVID-19;
  • Business capital expenditure intentions.
     

The collection was conducted through a telephone based business survey between 22 April and 28 April 2020, with a sample size of 2,014 businesses. The final response rate was 60%.

This release forms part of the suite of additional products that the ABS is producing to measure the economic impact of the COVID-19 coronavirus. Future information collected in this survey will evolve to maintain relevance in a changing environment.

Business response to JobKeeper Payment scheme

Employment intention decisions

More than two in five businesses (44%) reported that the announcement of the JobKeeper Payment scheme influenced their decision to continue to employ staff.

A greater proportion of small (0-19 persons) and medium businesses (20-199 persons) (both 45%), compared to large businesses (200 or more persons employed) (32%), reported that the JobKeeper Payment scheme influenced their decision to continue to employ staff.

Businesses in Accommodation and food services were the most likely to report the JobKeeper Payment scheme having influenced their employment decisions (67%).

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  1. Proportions are of all businesses.

JobKeeper Payment scheme registration

Three in five businesses (61%) reported having registered or intending to register for the JobKeeper Payment scheme.

By business size, 61% of small, 60% of medium and 45% of large businesses reported having registered or intending to register for the JobKeeper Payment scheme.

The area of each segment in the diagram below shows the relative share of each industry division of total jobs. The figures within the segments represent the proportion of businesses in each industry that have registered or intend to register for the JobKeeper Payment scheme.

Industry share of total jobs(a) and the proportion of businesses that registered or are intending to register for the JobKeeper Payment scheme(b)

The following image represents the industry share of total jobs and the proportion of businesses that registered or are intending to register for the JobKeeper Payment scheme.

Industry share of total jobs(a) and the proportion of businesses that registered or are intending to register for the JobKeeper Payment scheme(b)

The following image represents the industry share of total jobs and the proportion of businesses that registered or are intending to register for the JobKeeper Payment scheme.

The area of each segment shows the relative share of each industry division of total jobs. The figures within the segments represent the proportion of businesses in each industry that have registered or intend to register for the JobKeeper Payment scheme.

The legend for the image shows 4 categories (proportion of businesses registered or intending to register) by colour:

Maroon: Less than 25% registered or intend to register
Green: 50% to 74% registered or intend to register
Orange: 25% to 49% registered or intend to register
Blue: 75% or more registered or intend to register

The breakdown of the graph represents the proportion of businesses in each industry businesses registered or intending to register:
Orange: Health care and social assistance 38%.
Green: Retail trade 65%.
Orange: Professional, scientific and technical services 42%.
Blue: Construction 80%.
Blue: Accommodation and food services 76%.
Green: Manufacturing 65%.
Green: Transport, postal and warehousing 54%.
Green: Education and training 72%.
Green: Wholesale trade 68%.
Green: Other services 73%.
Blue: Administrative and support services 79%.
Maroon: Financial and insurance services 19%.
Green: Arts and Recreation services 63%.
Green: Retail, hiring and real estate services 54%.
Maroon: Mining 17%.
Orange: Information media and telecommunications 45%.
Maroon: Electricity, gas, water and waste 13%.

a. ABS Cat. No. 6150.0.55.003 - Labour Account Australia, Quarterly Estimates, December.
b. Proportions are of all businesses.

Four in five businesses in the Construction industry have registered or intend to register for the JobKeeper Payment scheme; this industry represents 8% of total jobs in the economy. By contrast, while the Health care and social assistance industry has the highest share of total jobs in the Australian economy (13% of total jobs), less than half of all businesses in this industry reported having registered or intending to register for the JobKeeper Payment scheme.

Reasons for not registering for the JobKeeper Payment scheme

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  1. Proportions are of businesses who do not intend to register for JobKeeper.
  2. Businesses could select more than one option.

Of those businesses that do not intend to register for the JobKeeper Payment scheme (33% of all businesses), the most common reason reported was that the business does not meet the eligibility criteria (55%); large businesses were most likely to report not meeting the eligibility criteria (81%).

By business size, small businesses were most likely to report insufficient cash flow (8%) as a reason for not intending to register for the JobKeeper Payment scheme.

By industry, of those businesses that do not intend to register for the JobKeeper Payment scheme:

  • businesses in Education and training (97%) were the most likely to report that the business does not meet the eligibility criteria;
  • three in five businesses in Arts and recreation services (58%) reported that none of their employees meet the eligibility criteria;
  • a quarter of businesses in Education and training and Information media and telecommunications (both 24%) reported that they do not have sufficient cash flow to continue paying staff before JobKeeper payments commence; and,
  • difficulty in understanding the eligibility criteria was most likely to be reported by businesses in Other services (19%) and Accommodation and food services (19%).
     

Reasons for not registering for the JobKeeper Payment scheme

A range of additional comments were provided by the 33% of businesses that reported that they did not intend to register for the JobKeeper Payment scheme. Presented below are comments from those that reported that their business was not eligible. The bigger and bolder words reflect the more common themes identified by businesses.

Image Word Cloud: A range of additional comments were provided by the 39% of businesses that reported that they did not intend to register for the JobKeeper Payment scheme.
Presented in the word cloud are comments from those that reported that their business was not eligible. The bigger and bolder words reflect the more common themes identified by businesses.

The approximate order from biggest to smallest:
Trading as normal
Not eligible
Business is okay
Revenue has not dropped 30%
Retaining staff without JobKeeper
Essential business
Able to pay staff
Not yet
Revenue has increased
Financially okay
Already let staff go
Will look into it
Haven’t looked into it
Staff on leave
Staff working from home
Most staff are visa holders
Would apply but not eligible

JobKeeper Payment scheme – expected employee eligibility

Of businesses that reported having registered or intending to register for the JobKeeper Payment scheme:

  • 44% expected all of their employees to be eligible for the scheme;
  • 29% expected more than half their employees to be eligible for the scheme; and,
  • 21% expected less than half of their employees to be eligible for the scheme.
     
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  1. Proportions are of businesses registered, or intending to register for JobKeeper Payment Scheme.

Of businesses registered or intending to register for the JobKeeper Payment scheme, 46% of small businesses, 13% of medium businesses and 7% of large businesses reported that they expected all of their employees to be eligible for the scheme.

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  1. Proportions are of businesses registered, or intending to register for JobKeeper Payment scheme.
  2. Proportions do not add to 100% as some businesses reported "don't know".

Industries with the highest proportion of businesses that expected more than half their employees to be eligible for the JobKeeper Payment scheme were:

  • Information media and telecommunications (99%);
  • Finance and insurance services (97%); and
  • Electricity gas water and waste services (96%).

Anticipated adverse business impacts due to COVID-19

Seven in ten businesses reported that reduced cash flow (72%) and reduced demand for goods and services (69%) are expected to have an adverse impact over the next two months.

This compares to two thirds of businesses reporting reduced demand for goods and services (64%) and reduced cash flow or turnover (66%) in the March Business Impacts of COVID-19 survey.

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Two in five businesses reported that they expect uncertain financial markets as a result of COVID-19 to have an adverse impact on business in the next two months; several businesses commented that this uncertainty was specifically related to the value of the Australian dollar and commodity prices.

Anticipated adverse business impacts due to COVID-19, by industry division(a)(b)

 Reduced demand for goods or servicesSupply chain uncertaintyStaff shortagesReduced cash flowReduced access to credit or additional fundsReduced ability to pay operating expensesGovernment restrictionsUncertain financial markets
 %%%%%%%%
All Businesses
69
41
15
72
24
41
53
44
Mining
38
33
31
38
17
17
52
51
Manufacturing
82
59
9
75
33
57
53
65
Electricity, Gas, Water and Waste Services
44
32
24
40
8
18
43
32
Construction
73
58
8
77
31
35
39
42
Wholesale Trade
81
66
34
69
27
46
66
56
Retail Trade
61
59
27
62
16
41
47
42
Accommodation and Food Services
84
48
17
88
38
70
84
41
Transport, Postal and Warehousing
69
37
10
69
27
46
42
20
Information Media and Telecommunications
78
35
1
67
33
34
36
35
Financial and Insurance Services
41
18
8
45
18
19
37
62
Rental, Hiring and Real Estate Services
66
25
32
63
25
37
46
47
Professional, Scientific and Technical Services
62
23
2
65
16
31
40
47
Administrative and Support Services
80
34
20
81
12
61
74
46
Education and Training
79
17
21
88
25
57
79
30
Health Care and Social Assistance
57
33
32
68
16
23
73
27
Arts and Recreation Services
83
18
27
84
24
71
94
34
Other Services
73
43
5
86
30
48
61
52
a. Proportions are of all businesses.
b. Businesses could select more than one option.
 

More than half of all businesses in the Wholesale trade (66%), Retail trade (59%) and Manufacturing (59%) industries reported that supply chain uncertainty was expected to have an adverse impact on business. Several businesses commented on expected logistical issues due to inter-state travel restrictions & border closures.

Government restrictions such as social distancing measures have had a significant impact on the operating environment for businesses in Accommodation and food services. In the March Business Impacts of COVID-19 survey nine out of ten businesses in Accommodation and food services reported that government restrictions had an adverse impact on operations. Businesses in this industry are anticipating that these restrictions will continue to have an impact in the next two months; with 84% reporting that Government restrictions were expected have an adverse impact on their business in the next two months.

Capital expenditure intentions of businesses

Businesses selected in this survey are a sub-sample of the March Quarter 2020 New Capital Expenditure Survey; the New Capital Expenditure Survey collects information about businesses future capital expenditure intentions. Capital expenditure expectations data is one leading indicator of business confidence.

Presented below is preliminary information about business capital expenditure intentions for the 2020-2021 financial year.

The image presents preliminary information about business capital expenditure intentions for the 2020-2021 financial year in four boxes.
This image presents preliminary information about business capital expenditure intentions for the 2020-2021 financial year.

16% of businesses revised down their 2020-2021 capital expenditure intentions between December 2019 and March 2020(a). This is compared with a 11% average for the same period over the 5 years 2015-16 to 2019-20(b).

8% of businesses revised up their 2020-2021 capital expenditure intentions between December 2019 and March 2020(a). This is compared with a 10% average for the same period over the 5 years 2015-16 to 2019-20(b).

73% of businesses reported no intended capital expenditure for 2020-21 in the March 2020 quarter(a). This is compared with a 77% average for the same period over the 5 years 2015-16 to 2019-20(b).

3% of businesses reported no change in their 2020-2021 capital expenditure intentions between December 2019 and March 2020(a). This is compared with a 2% average for the same period over the 5 years 2015-16 to 2019-20(b).

a. The intended capital expenditure change was calculated using businesses in the Business Impacts of COVID-19 survey sample which were selected in both the December 2019 and March 2020 quarters of the New Capital Expenditure Survey.
b. 5 year average are calculated based on responses to December and March quarter. New Capital Expenditure Survey for each year 2015-16 to 2019-20.

a. The intended capital expenditure change was calculated using businesses in the Business Impacts of COVID-19 survey sample which were selected in both the December 2019 and March 2020 quarters of the New Capital Expenditure Survey.
b. 5 year averages are calculated based on responses to December and  March quarter, New Capital Expenditure Survey for each year 2015-16 to 2019-20.

Of those businesses that revised down their 2020-21 capital expenditure forecast between December 2019 and March 2020:

  • 54% reported a reduced ability to pay operating expenses;
  • 72% reported decreased cash flow;
  • 25% reported reduced access to credit or additional funds.
     

Of those businesses that revised up their 2020-21 capital expenditure forecast between December 2019 and March 2020:

  • 22% reported a reduced ability to pay operating expenses;
  • 66% reported decreased cash flow;
  • 18% reported reduced access to credit or additional funds.
     

The above estimates on capital expenditure intentions are based on preliminary data from the March quarter 2020 New Capital Expenditure Survey. Estimates from this survey will be released on 28 May 2020 (cat. no. 5625.0).

Technical note - questionnaire

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1(a) Is your business currently trading?
 ☐ Yes [Go to Question 2]
 ☐ No [Go to Question 1b]
  
 (b) Is the halt in business trading a result of COVID-19?
 ☐ Yes [Go to Question 2]
 ☐ No [Go to Question 2]
  
Note: At the end of March, the Australian Government announced the JobKeeper Payment scheme, which allows businesses impacted by COVID-19 to access a subsidy, to keep paying their employees.
  
2Has the announcement of the JobKeeper Payment scheme influenced this business’s decision to continue employing staff?
 ☐ Yes
 ☐ No
 ☐ Don't know
  
3(a) Has this business registered for the JobKeeper Payment?
 ☐ Yes [Go to Question 4]
 ☐ No [Go to Question 3b]
 ☐ Don't know [Go to Question 3b]
  
 (b) Does this business intend to register for the JobKeeper Payment?
 ☐ Yes [Go to Question 4]
 ☐ No [Go to Question 3c]
 ☐ Don't know [Go to Question 4]
  
 (c) You indicated that this business does not intend to register for the JobKeeper Payment. Is that due to any of the following reasons? (select all that apply)
 ☐ Business does not meet eligibility criteria (e.g. turnover threshold)
 ☐ All employees do not meet the eligibility criteria (e.g. casual staff not employed on a regular basis for more than 12 months)
 ☐ Do not have sufficient cash flow to continue paying staff before JobKeeper payments commence
 ☐ Difficulty understanding eligibility criteria
 ☐ Other (please specify)
 [Go to Question 5]
  
4To the best of your knowledge, what proportion of employees are expected to be eligible for the JobKeeper Payment?
 ☐ Less than 25%
 ☐ 25% to less than 50%
 ☐ 50% to less than 75%
 ☐ 75% or more, but not all
 ☐ All employees
 ☐ Don’t know
  
5How do you expect Coronavirus (COVID-19) to adversely impact your business over the next 2 months: (select all that apply)
 ☐ Reduced demand for goods or services
 ☐ Supply chain uncertainty (e.g. unable to source stock or raw materials, increasing cost of inputs)
 ☐ Staff shortages (e.g. due to COVID-19 related illness, quarantine measures, school closures or transport interruptions)
 ☐ Reduced cash flow
 ☐ Reduced access to credit or additional funds
 ☐ Reduced ability to pay operating expenses (e.g. rent, loan repayments, wages etc.)
 ☐ Government restrictions
 ☐ Uncertain financial markets (e.g. $AUD, interest rates, stock market)

History of changes

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4/05/2020 - A correction was made a graph key. Specifically the Proportion of businesses expected to be eligible for the JobKeeper Payment scheme, by employment size graph. The key label had the word employees duplicated. A correction was made to the Methodology Scope and Coverage section. The industry list was incomplete.