Report: Fuel prices bite back, business sentiment remains flat

Business owners are turning their attention back to price pressures after two years of pandemic panic according to the latest MYOB Business Monitor.

Just as the issue of fuel prices made the agenda for the Prime Minister’s National Press Club address this week, so too are they top of mind for Australian business owners.

That’s because new survey data from MYOB has shown that fuel costs have outstripped concerns about the pandemic as the primary pressure keeping them up at night.

The report also found that business owners are less confident in the state of the economy, with just 53 percent anticipating things will improve in the next 12 months (down from 57 percent in June last year).

These findings are presented in the latest edition of the MYOB Business Monitor, which compiles responses from 1004 business owners, managers and directors regarding their attitudes on a wide range of topics.

Key findings from the latest MYOB’s Business Monitor:

• 41% of all respondents indicated that fuel prices were causing ‘extreme’ or ‘quite a lot’ of pressure to their businesses, pushing the pandemic down the list (34%)
• Respondents in the finance and insurance sector were most likely (70%) to anticipate economic improvement in the next 12 months
• Construction and trades businesses have lowered expectations from 56% in June 2021 to 41% today
• Almost a fifth (19%) expect revenues to grow in the year ahead as a direct result of the pandemic
• The report also breaks out insights from mid-market businesses (with 20-199 employees), showing some clear differences in challenges faced between the two groups

“Unsurprisingly, given the past two years we’ve had, business pressure points have been felt keenly by businesses, particularly those with 20-199 employees (mid-market businesses),” said Emma Fawcett, General Manager (SME) for MYOB.

“In fact, more mid-market businesses felt ‘extreme’ or ‘quite a lot of pressure’ from the common business pressures overall, compared to the national average,” she said.

Revenue and growth a mixed bag

“Forty-one per cent of SMEs said their revenue is the same as it was a year ago, up from 30 percent of respondents who stated their revenue had maintained six months prior,” said Fawcett, indicating some sign of stability despite the gloom of overall business sentiment.

Unfortunately, fewer business owners have reported revenue growth in that period, down from 30 percent last June to just 25 percent now.

And with 33 percent of respondents indicating revenues are down, compared with 39 percent in 2021, we might infer many businesses are in something of a holding pattern and living with the losses incurred during 2020-21.

Revenue growth expectations for the year ahead are similarly tepid with just 43 percent of respondents betting on an increase, with nearly half of those stating they expect a windfall as a direct result of COVID-19.

“Increased consumer demand accounts for 29 percent of those expecting an increase, and for 19 percent, their expected increase is due to the COVID-19 pandemic,” said Fawcett.

“Following the challenges of the last 24 months, Australia’s small business operators will need to remain resilient as they plan for the year ahead.

“Hopefully 2022 brings a period of stability that will enable them to back their businesses, their revenue predictions and their growth plans, to ensure the success of a sector that makes up 95 percent of Australian businesses.”

Discover more about the pressures faced by the Australian business sector in this year’s first edition of the MYOB Business Monitor report.