Businesses confidence in the Sunshine Coast Region increased in the September quarter, but the long-term outlook remains blurred by uncertainty, especially as stimulus support begins to taper off.
The latest Suncorp-CCIQ Pulse Survey of Business Conditions, a quarterly survey conducted to give a snapshot of business conditions in Queensland, found that while there was some recovery, the economy is stalled due to ongoing restrictions.
Key results in the Sunshine Coast region show:
• Improvements across all indicators and are forecasting further recovery during the December quarter;
• Despite a strong recovery in consumer demand, business profitability continues to be constained by social distancing requirements; and
• Nearly all surveyed businesses (99%) believe they could only survive up to 12 months when stimulus support ends.
Caloundra Chamber of Commerce President Michael Shadforth said the results are reflective of the resilience of the Sunshine Coast business community and their collective determination to work their way out of this pandemic.
“Many businesses on the Sunshine Coast, from varying industries, are bouncing back from the peak of COVID trading far better than expected and at a greater level than other regions, however this report confirms that there is still work to be done,”
“While it is positive to see sentiment improving this quarter, our local businesses need restrictions eased further, so they can maximise the summer season to come,”
“We’ve been calling for months to have restrictions eased further because enabling business to open up, while still operating in a COVIDsafe way will allow them to trade profitability.
“The Christmas season is crucial for businesses, and we need to give them a real opportunity to fully open up and trade viably, so they can stay open and keep their staff employed,” Mr Shadforth said.
CCIQ economist Jack Baxter said that while overall business sentiment increased from the previous quarter, the forecasted trends are plateauing well short of a full recovery.
“The results of the latest survey show businesses feel the recovery being experienced to date will be as good as it gets if there are no changes to current operating conditions,” Mr Baxter said.
“Many small businesses are still experiencing a stimulus-driven recovery in sales and revenue, but ongoing restrictions are constraining their ability to manage costs and boost profitability.
“One-half of respondents indicated their profitability continues to decline, despite a sharp improvement being recorded across the performance and cost indicators as business re-open.
“This indicates that despite being open and trading, social distancing and patron limits put a cap on profitability and economic productivity.
“And despite that decreased profitability, the crisis has not impacted their fixed operating costs.
There’s still utility bills, rent and insurance to pay with deferred payments becoming due in the New Year.
“The concern for business is being expected to operate in these same conditions, with the same caps on their profitability, but without stimulus support. And that leads to no room for ongoing recovery,” Mr Baxter said.
Mr Baxter flagged that the September quarter’s Hot Topic Survey raised further concern, with nearly all Queensland businesses now uncertain about their survival during the New Year as stimulus support ends.
“When stimulus support ends, and when loan repayments, deferrals and tax breaks resume, businesses must be standing on their own two feet.
“This is unlikely, as ninety-nine per cent of businesses indicating they are unsure of their ability to operate beyond 12-months without support, especially if current restrictions are not lifted,” Mr Baxter said.
Suncorp Executive General Manager Business Banking Glenn Haslam said businesses have had a challenging year however it’s pleasing to see that for the majority, business confidence is returning as restrictions ease.
“Whether it’s a cotton farmer in regional Queensland or restaurant owner on the Gold Coast, businesses across Queensland have shown their spirit and determination by adapting to meet their customers’ needs and changed circumstances this year,” Mr Haslam said.
“Although there is still a long way to go, as always Suncorp is there to help our customers get through these difficult times.”