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Rocky road ahead to business recovery

Release Date: 17/08/2020
A recent survey by the state’s peak business organisation, Business NSW, suggests businesses are less pessimistic about the months ahead but key indicators show there is still a long way to go to recovery.
“Our Business Conditions Survey indicated that business conditions hit rock bottom in the June quarter but there was a recovery in business expectations for the September quarter,” Hunter Business Chamber CEO Bob Hawes said.
“This suggests the reopening of the economy and continuation of government support has boosted business optimism.
“Businesses are still circumspect about the future, however, with 39 per cent indicating their business was at high risk of failing without support measures such as JobKeeper, tax relief, interest waivers and other measures.”
Re-opening the regions to visitors had bolstered the outlook in regional centres and provided a much-needed jolt for local business operations.
“The relaxation of trading restrictions appears to have provided welcome relief for the most impacted sectors. Accommodation and food service businesses recorded the strongest turnaround when asked to look ahead to the September quarter,” Mr Hawes said.
“While there are positive signs, the outbreak in Victoria has clearly impacted border communities and dented business confidence generally.
“There was a 20 per cent drop in the number of NSW businesses expecting a stronger economy, and 41 per cent of businesses reported that they were more pessimistic about the impact of COVID-19 in July than they were in April.
“Businesses have entered a cost cutting phase which is starting to have a flow-on effect for customer demand, jobs and the potential for our economy to bounce back.
“About 90 per cent of businesses in the Hunter Valley and 80 per cent in the Newcastle and Lake Macquarie statistical area indicated that reducing business costs was a priority.
“Growing revenue also emerged as a pressing concern, with about 75 per cent of businesses in both areas indicating a need to increase business income, and more than 80 per cent reporting decreased profits.
“This reaffirms the need for urgent action on the recommendations made in our Back on Track report which outlined a COVID-recovery plan to steady the economy and protect jobs.
“Governments should continue to work closely with industry to minimise the spread of COVID-19 and to avoid a further round of crippling restrictions which would further hurt the economy.”

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