Central Highlands Business Survey 2021
June 2021
Key Findings
1 While overall performance and revenue index scores have returned to pre COVID-19 levels, one in three businesses (32%) are still experiencing a negative impact from the global pandemic.
2 Looking to the next 12 months, there is a good level of confidence, with 86% of businesses anticipating their overall performance will increase (42%) or at least remain the same (44%). Businesses are, however, still showing caution, with 63% placing capital investment on hold for the coming year.
3 Australia’s labour shortage is being felt in the Central Highlands, with four in five businesses (84%) having difficulty finding suitable staff. Not only does this impede on businesses’ ability to grow, it also puts mounting pressure on existing staff.
Overall Performance
The index score is developed by assigning value to the qualitative survey answers, creating a rating between 1 and 100. As a guide, 50 would indicate the performance was neutral, less than 50 weaker and above 50 stronger.
+ The overall performance index score has returned to its pre COVID-19 level. Almost a third of businesses (32%) performed stronger, with the ‘health care and social assistance’ sector reporting the greatest increase. 27% of businesses performed weaker, with the ‘education and training’ and ‘construction’ sectors reporting the greatest decrease.
+ Looking to the next 12 months, businesses are confident, with 86% anticipating their overall performance will increase (42%) or at least remain the same (44%).
+ This confidence extends to the regional economy, with 90% of businesses anticipating it will perform stronger (40%) or about the same (50%) over the coming year.
Revenue
+ The revenue index score bounced 21 points from the significant low experienced last year. Despite this index increase, two in five businesses (39%) experienced a decrease in revenue over the past 12 months. The ‘education and training’ and ‘mining’ sectors reported the greatest decrease.
+ Business optimism is evident, with 83% anticipating revenue would increase (45%) or remain the same (38%) over the next 12 months.
Revenue cont.
Staffing
+ Approximately a third (35%) of businesses experienced a decrease in staffing over the past 12 months. The ‘construction’ and ‘transport, postal and warehousing’ sectors reported the greatest decrease.
+ 85% of businesses are anticipating staffing levels will remain the same (54%) or increase (31%) over the next 12 months.
+ The highest increase was seen in the customer index score, growing 25 points over the past 12 months. The ‘food and beverage services’ and ‘health care and social assistance’ sectors reported the greatest increase.
+ Business sentiment for the next 12 months is positive, with 89% anticipating customer levels will increase (44%) or remain the same (45%) over the next 12 months.
Costs
+ The costs index score increased 19 points over the past 12 months, with 66% of businesses experiencing a rise in costs. The ‘manufacturing’ and ‘repair and maintenance services’ sectors reported the greatest increase, possibly due to global supply chain shortages fuelling price rises.
+ 64% of business are anticipating costs to increase over the coming year.
Capital Investment
+ 58% of businesses made no change to their capital investment over the past 12 months. 35% increased their investment, with the ‘health care and social assistance’ sector reporting the greatest increase.
+ As a result of the uncertainty surrounding the next 12 months, a majority of businesses (63%) have placed their capital investment on hold.
Constraints to Growth
+ 50% of businesses reported ‘recruiting and retaining suitably qualified labour’ as one of the top constraints to growth. This is a significant increase from the March 2020 survey (25%), indicating the issue has been exacerbated over the past 18 months.
44% Level of demand/economic activity
2020: 25%
2020: 41%
2020: 26%
2020: 20%
COVID-19 Impact
+ Half (51%) of local businesses were negatively impacted by COVID-19 in March 2020. The ‘accommodation’ and ‘manufacturing’ sectors reported the greatest negative impact.
+ While the impact has eased for some businesses, almost a third (32%) are still experiencing negative repercussions from lockdowns, border closures and supply chain disruptions.
+ Looking to the next 12 months, business sentiment is positive.
In focus: Skills Shortage Recruitment difficulty
+ Australia’s labour shortage is being felt in the Central Highlands, with 84% of businesses having difficulty finding suitable staff. The ‘construction’, ‘mining’ and ‘transport, postal and warehousing’ sectors reported the greatest difficulty.
+ Businesses cited the regional location (67%) and ‘competing employment opportunities’ as the major barriers to recruitment.
+ ‘Technician and trade worker’ (37%) and ‘professional’ (30%) occupations are in highest demand.
+ The skills shortage is impacting on businesses’ ability to grow and expand (66%). It also puts mounting pressure on business owners and existing staff.
+ 40% of businesses are currently outsourcing work, with a further 12% looking to outsource in the next 12 months.
Recruitment barriers
67% Location – regional
62% Competing employment opportunities
51% Insufficient skill levels
47% Insufficient experience Occupations in demand
37% Technicians and trade workers
30% Professionals
66% Business cannot grow and expand
56% Higher wages to retain/attract staff
24% Labourers
17% Sales workers Skills shortage impact
Mental and physical health deteriorates as workload and stress is increased on fewer employees.” Respondent