The latest NSW Business Conditions survey shows businesses across the Hunter have been hit hard by the effects of the drought, bushfires and COVID-19.
Responses show that 70 per cent of businesses said they would have to close or scale down substantially if the coronavirus social distancing and lockdown measures continued long term.
The special COVID-19 edition of the survey, which included more than 200 Hunter responses from a total of almost 2,000 across the state, clearly shows the extent of the impact that multiple economic shocks have had on the NSW economy over the first quarter of the year.
The survey was completed over two weeks late last month.
“Business conditions have deteriorated rapidly,” Hunter Business Chamber Chief Executive Bob Hawes said.
“There was a doubling of COVID-19-related revenue losses reported by respondents between weeks one and two of the survey period.
“Businesses have had to enter hibernation with significant adjustments to staffing levels and capital spending, and it’s clear that some won’t make it through to the other side.
“The impact of COVID-19 on confidence is most apparent in business expectations for the next quarter, with confidence falling to levels not seen since the Global Financial Crisis.”
Mr Hawes said while COVID-19 represented the most significant threat to the economy, the survey showed that many local economies had already been significantly weakened by other factors, including bushfires and drought.
“This reinforces our understanding about the severe ‘indirect’ impact of the bushfires on our visitor economy, where we saw people staying away in droves from tourist strongholds like the vineyards and Port Stephens due to thick smoke haze or fear of fire,” Mr Hawes said.
“These places experienced a significant downturn during what would normally be the peak Christmas period and are now facing a bleak Easter, with no chance of economic recovery.”
Businesses in the Newcastle and Lake Macquarie statistical area were less affected than those in the Hunter Valley but still showed depressed levels of confidence which Mr Hawes said would be regarded as “catastrophic by normal standards”.
The survey also indicated there has been a rapid shift in business priorities away from growth objectives with businesses instead becoming more concerned about business solvency and downsizing.
The report indicates a significant downturn across the state in most key business indicators:
- 67 per cent reported reduced profit;
- 61 per cent reported reduction in sales revenue;
- 47 per cent reported reduction in capital spending;
- 27 per cent had reduced staffing levels.
Tourism was the most severely affected industry, with Arts and Recreation services and Accommodation and Food Services all showing significant revenue loss.
Nearly 90 per cent of respondents expected the June quarter to be weaker than March.
Mr Hawes said it was important that “every tier of government does all that is possible to keep businesses in operation and staff employed”.
“It is also clear that further restrictions on movement and social gathering would be highly detrimental to business, so it is important that the community observes the current rules and regulations, especially over the coming holiday period, so we don’t see more limitations imposed,” he said.
To view the results of the survey visit the Business NSW website.