Business Confidence in Western Australia
12 August 2020
Mark Giglia, Director, AR Advisors
As Western Australians progress through the new financial year, it’s important to note that businesses are in different stages of recovery as they navigate through a new economic climate. Some are fortunate to have escaped a downturn, whilst others have fallen victim to complete shutdown and are unable to operate effectively during the pandemic.
Those lucky enough to have escaped the effects of the downturn are looking to continue growing their business operations and identifying the right opportunities along the way – albeit organically or by acquisition. Some have battle wounds from deeper industry impacts and are exploring exit paths and scenarios, not knowing what the future looks like past Q1. For others, it’s a wait and see approach – monitoring customer engagement with an optimistic mindset in hope that any uptick isn’t a short-lived spike.
Whilst each industry is different, overall business confidence is high with an overwhelmingly positive response to Western Australia’s easing of restrictions. Pubs and gyms are a perfect example of people rushing back to endure a torturous workout or have drinks at their local watering hole. Some have seen a loss of clients being more than made up with new enquiries or numbers through the door.
Whilst there is no certainty to the ‘second wave’, there is a wave of expectation that there will be job losses as a result of a cut JobKeeper payment in October (now that the government has announced JobKeeper 2.0 with decreased payments and more criteria for eligibility). Businesses that need the support will continue to receive it, but those not as successful as they were back in April may cease to receive the support and lose confidence in future profitability.
The next few months will be a critical time for a lot of businesses. Emphasis should be placed on forecasting without JobKeeper, continuing to reassess debt repayments, and ensuring ongoing dialogue is had with clients to understand their cash flow and where spend is likely to go for future revenue.