BankSA’s State Monitor shows there’s been a big jump in state pride post-COVID, but businesses are worried about the future
Consumer confidence has jumped as some businesses reopen, BankSA says, but businesses themselves have concerns the next few months could be very tough indeed.
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Almost a third of businesses surveyed in the most recent BankSA State Monitor fear they might not survive until the end of the year, but consumer confidence and state pride remain strong, bolstered by our adept handling of the COVID-19 crisis.
Perhaps surprisingly, overall both business and consumer confidence remain in positive territory.
Business confidence fell 10.1 points from 115.4 in February to 105.3, where 100 is a neutral measure, while consumer confidence increased for the second survey in a row, jumping 9 points to 110.3.
BankSA managing director Nick Reade said the survey results needed to be read with a measure of caution however, as they most likely reflected greater confidence compared with the start of the COVID crisis, not compared with life as normal.
“We had such a significant event midstream between February’s survey and this one ... I think it’s important we don’t overplay the upside or downside on these figures,’’ he said.
He also said that the business confidence results were measured before this week’s announcement of an extension to the JobKeeper support package, which would give many businesses more breathing room.
Overall, Mr Reade said, the Monitor shows that businesses at the smaller end of the spectrum have been particularly hard hit.
“It has been a tough few months for businesses, particularly for the smaller micro SME businesses and the wholesale and retail sector, as people cautiously saved rather than spent and fewer consumers have made large purchases,’’ he said.
“Businesses are reticent to take on more staff, a higher number of SMEs have recorded falling
turnover, and there are fears the pandemic will have an impact on the economy for some
time to come.”
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Mr Reade said consumers were seeing more businesses reopen and that was translating into more confidence, but with many businesses supported by JobKeeper or themselves reporting that times were tough, that confidence could be construed as optimistic.
State pride among consumers had its biggest jump ever, up 24 per cent and was sitting at the highest level since February 2013, with Mr Reade saying the state's success in handling the crisis would have underpinned this.
Consumers were realistic about job mobility however, with a slight fall in confidence that changing jobs would be a possibility.
Business employment and intention to hire over the past three months recorded its largest
decrease ever with a 34 per cent negative shift, and there was a four per cent decline in businesses wanting to hire over the coming three months.
Businesses are concerned about income security, with two thirds “worried”, up 21 per cent,
and at its highest level since the survey began. There was also a 30 per cent negative shift in
how businesses felt about their current situation, which was also the largest decrease and
lowest level ever recorded.
One of the key findings of the Monitor was that there was a large degree of uncertainty about the future, with more than 90 per cent of businesses worried about the impact of COVID-19 on the SA economy, but a slim majority, or 54 per cent, believe that the climate for doing business will improve over the next 12 months.