Seeley International’s resilience, planning shows SA business confidence on the mend
SA business confidence made a comeback in the June quarter, exemplified by a Lonsdale family-owned business that employs 500 staff and has its eye firmly on the future of manufacturing in Australia.
SA Business
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Business confidence in South Australia rebounded in the June quarter from a historical low, with leaders like Seeley International founder Frank Seeley defying economic uncertainty around COVID-19 to plan for future growth and sustainability.
Results from the June quarter of the Business SA – William Buck Survey of Business Expectations offer a glimmer of hope for the state’s economic recovery as confidence rose 26 points to 67 points, up from a “historic rock bottom” of 41 points.
“The tide has turned in the June quarter with the business community much more positive about the road ahead than first (March quarter) forecast,” Business SA chief executive Martin Haese.
“With majority of businesses still impacted by trading restrictions during the quarter, the increase, the largest in 13 years, is significant and signals a hint of optimism in the air,” he said.
However, confidence levels are still down 17.4 points from where they were this time last year.
Business conditions performed better than expected in the June quarter, up 0.1 points to 66.9 points. And despite the ongoing uncertainty and challenges with COVID-19 nationally, business conditions here are expected to jump for the September quarter to above 80 points.
Revenues were still impacted with 22 per cent of respondents seeing a drop of more than 50 per cent. The worst affected businesses were in the accommodation and food retail and tourism sectors with revenues down 80 per cent and 94.5 per cent, respectively.
The introduction of JobKeeper in March was a saving grace for impacted businesses and
employee retention, Mr Haese said.
“According to the survey, 65 per cent of respondents are receiving the wage subsidy while 60.2 per cent said of those on the scheme said it had allowed them to maintain pre-COVID-19 staffing levels which underscores the critical importance for it to continue.”
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Mr Seeley’s 1972-established Lonsdale cooling and heating systems manufacturer Seeley International did not qualify for the subsidy JobKeeper with its revenue down about 25 per cent, and not the threshold requirement of 30 per cent or more.
The business chaired by Mr Seeley stood by its 300 staff in SA and 200 at Albury in NSW with everyone taking a pay cut to tide over the situation.
“Things could have looked very different for us if not for the support of our staff,” said Mr Seeley, who heads up the business that sells up to 60,000 systems annually through a 350-strong national dealership network and also exports to 120 countries.
“From the very top down, everyone pulled together. We didn’t want to lose any more jobs than we absolutely had to and left it up to the staff, which says a lot about the culture of the company.”
The strong demand and rising sales in the June quarter also helped, boosted by more people moving to warm up while working from cold homes, he said.
The business, which makes some of its own investor motors wants to bring more manufacturing back to Australia.
“The advantage of making motors offshore is there, but not much, and with some funding support from the state and federal governments, we can make it all here with the benefit of creating more jobs and economic returns.
“It cost us a million dollars to get into making electric motors for the first time in 1981. But that year, we got an order from the Iraqi Trading Company for 100,000 portable coolers, which to this day remains the biggest order we’ve ever had for the product.
“By making our own motors, we saved A$10 per motor back then. We can do it again.
“We have been in business for 48 years, being one of the big manufacturers here, and we could do more. I want to see it happen in my lifetime,” Mr Seeley, 79, said.
William Buck managing director Jamie McKeough COVID-19 had divided the economy, but conditions have settled in SA.
“The depths of despair anticipated back in March, fortunately, have not materialised,” he said.