In April business confidence plummeted to a second consecutive record monthly low… and new research reveals the stress small business owners are under
Roy Morgan Business Confidence was down 18.2 points, (-19.1%) to 76.9 in April 2020, the organisation reports – however, the second half of April showed a distinct improvement over the first half, as it became clear that Australia was “flattening the curve” of new COVID-19 infections.
In the first two weeks of April the index hit a low of only 69.3, but averaged 82.0 during the second half of April.
The sharp decline in Business Confidence in April was driven by more businesses, 64.8% (up 25 points) saying their business is ‘worse off’ financially than this time last year, businesses being less confident about the Australian economy into the future with nearly three-quarters, 73.2% (up 10.5 points), expecting ‘bad times’ over the next year and over half, 58.4% (up 12.3ppts), expecting ‘bad times’ over the next five years.
Only a third, 35.9% (down 10.3 points) of Australian businesses said the next year will be a ‘good time to invest in growing the business’, while nearly half, 48.2% (up 6.6 points), said it will be a ‘bad time to invest’.
But some Australian businesses are already looking past the COVID-19 pandemic and are growing more confident about the next year with 43.1% (up 3.6 points) expecting the business will be ‘better off’ financially this time next year, while only 27.6% (down 1.4 points) expect the business to be ‘worse off’;
Overall the April 2020 Business Confidence level is 26 points lower than it was a year ago, and a significant 37.7 points below the long-term average of 114.6.
Business Confidence for April came in slightly below the ANZ-Roy Morgan Consumer Confidence for the month of 79.8. Consumer Confidence has continued its recovery in recent weeks and now sits at 89.5 on the weekend of May 2/3, 2020.
Business Confidence fell most in NSW and South Australia in April but was up in WA and Tasmania.
“The announcement that Australia will undergo a three-stage re-opening process over the next two months to ‘reboot’ the economy has provided further hope that Australia may already be past the worst of COVID-19 and businesses can look forward to less restrictions on their activities in the coming weeks,” said Michele Levine, CEO of Roy Morgan.
Meanwhile new research from software provider MYOB has shown that 66% of small businesses feel COVID-19 has impacted their mental wellbeing, with 58% revealing the pandemic has negatively impacted their business.
The research, conducted with more than 1,200 small business owners and operators, has been released by MYOB to coincide with the launch of a new partnership with leading Australian not-for-profit in the preventative mental health space, Smiling Mind.
“This new research shows that 67% of respondents have experienced feelings of stress or anxiety trying to work around the new restrictions put in place in relation to COVID-19,” said MYOB Chief Employee Experience Officer Helen Lea.
“The research found that over the journey of running a small business, respondents have felt increased feelings of stress (64%) and anxiety (62%).”
The research also showed that the top five factors that have impacted respondents’ wellbeing in the last 12 months are COVID-19 (selected by 55% of respondents), finances (51%), work related stress (45%), lack of sleep (41%) and relationships (22%).
Two-thirds (66%) of respondents said they take time for their mental health, but 28% say they know they should but they don’t have time.
Managing cash flow and financial issues, long hours, work-life balance, feeling isolated, wearing multiple hats and a general feeling of responsibility for the businesses success or failure bring with it stress and anxiety.