Small business confidence crashes 53 points in 14 days as Coronavirus hits

EVEN BEFORE the COVID-19 pandemic, Australia’s small businesses were feeling stressed by the bushfire devastation and every day cost pressures.

Data from the Sensis Business Index, which measures small business confidence, shows a massive drop in confidence in just two weeks as the reality of Coronavirus hit Australia. Confidence fell from positive 40 on March 10 to negative 13 on March 24.

“Australia’s small businesses were feeling the squeeze before the impact of the Coronavirus hit,” said Sensis CEO John Allan. “But the massive fall in confidence in just a matter of 14 days, while not a surprise, was the fastest drop in the 25-year history of the survey."

The first survey respondents were in early March but as time progressed the stark reality of COVID-19 hit Australia’s small businesses quickly with sentiment changing mid-survey. At the start of March, 29.7 percent of SMBs had seen no impact on their business with 35.6 percent expecting to see an impact in the coming months. 

By the third week of March, 32 percent had seen a severe impact, 35 percent had seen some impact and 26 percent were expecting an impact.

“The extraordinary speed of the change in confidence is not something we’ve ever witnessed before; it was as if a speed train had hit the majority of small-medium businesses in Australia with 47 percent surveyed now worried about the future," Mr Allan said..

	4 to 10 March	11 to 17 March	18 to 24 March
Confident about the future	54%	40%	34%
Neither confident nor worried about the future	31%	24%	19%
Worried about the future	14%	36%	47%
Confidence Index – net balance	+40	+4	-13

“Despite the realities of lockdown, more than one-third (34%) of small businesses were showing resilience and still confident about the future, suggesting they are hopeful about a quick bounce back post lockdown,” Mr Allan said.

Small businesses across the country were not confident about the economy going into lockdown: 64 percent believed the economy had contracted and 30 percent believed it had stalled; 60 percent believe the economy will be in worse shape in 12 months.

Around the country

In terms of the state and territory economies, 57 percent of SMBs believe their state economy is shrinking, and 35 percent believe it is at stand still.  South Australian SMBs were most pessimistic with 67 percent feeling the SA economy was shrinking.

“ACT small businesses were the most confident (47.3% were confident) while South Australian SMBs were the most pessimistic (52.3% not confident).”

In the March quarter nearly one-third (30%) of SMBs saw the value of their goods or services decline and 44 percent reported that the prices they pay for goods and services they use increased during the quarter.

SMB Confidence:

State	Confident	Not Confident
Australia	38%	40%
Victoria	38.1%	43.9%
NSW	37.7%	38.2%
QLD	36.3%	41.9%
SA	26.9%	52.3%
Tas	46.3%	34.8%
WA	40.2%	35.5%
ACT	47.3%	27%
NT	40%	31.4%

Survey Details:

The Sensis Business Index is based on 1,015 online interviews conducted between March 4 and 28, 2020 with small and medium business proprietors or managers employing up to 199 people. This sample is drawn from metropolitan and major non-metropolitan regions throughout Australia with targets set for location and industry on page 36. Glow is responsible for fieldwork and Dynata for sampling.

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