Business confidence and revenue outlook improves

20 November 2020

Almost a quarter (24 per cent) of businesses reported an increase in their monthly revenue in November compared to 16 per cent in October, according to results released from the Australian Bureau of Statistics (ABS) today.

ABS Head of Industry Statistics John Shepherd said the latest Business Impacts of COVID-19 Survey showed signs of increasing confidence among businesses.

“As well as a greater proportion of businesses experiencing an increase in their revenue in November, one quarter (25 per cent) expect revenue to increase for December. Some businesses commented that seasonal factors had influenced these expectations.”

Mr Shepherd said the survey results also included information about capital expenditure plans for the next three months.

“One in five (22 per cent) businesses indicated they have capital expenditure plans over the next three months, with about three quarters (73 per cent) of these businesses expecting to spend the same or more than what is usual for this time of year.”

“We asked businesses what had influenced their capital expenditure plans. The most common factor reported by businesses was future economic uncertainty (29 per cent), however the proportion reporting this as a factor has halved since August (59 per cent).”

One in five (22%) businesses reported a revenue decrease in November. The proportion of businesses that reported a decrease in revenue has fallen each month since July. A greater proportion of businesses reported increased revenue in November compared to previous months (24% compared to 16% in October and 13% in September). 

This is the first time in the monthly series that a greater proportion of businesses have reported increased revenue (24%) compared to decreased revenue (22%). 

Sentiments related to monthly revenue expectations also improved, with a quarter (25%) of businesses expecting an increase in revenue for December. This is more than twice the proportion that expected an increase in revenue for August (11%) and September (9%).  

The industries most likely to report an expected increase in revenue for December were:

  • Accommodation and food services (49%)
  • Electricity, gas, water and waste services (36%)
  • Retail trade (32%)

A number of businesses commented that the easing of COVID-19 restrictions in Victoria and seasonal demand factors had influenced their revenue expectations.

In November, 8% of businesses reported an increase in the number of employees. 

Medium and large businesses were more than twice as likely as small businesses to report an increase in the number of employees (19% and 20% compared to 8%).  

Main factors reported by businesses in relation to the November increase in the number of employees were ‘business expansion’ and ‘seasonal variation’. 

One in ten businesses expect to increase the number of employees in December. These businesses were most likely to comment that ‘seasonal variation’ was influencing this expectation. Accommodation and food services (31%) was the industry with the greatest proportion expecting an increase in the number of employees for December.