Firms face 'cost of doing business' crisis

·2-min read

Lockdowns may be behind us but many small business owners are worried about the future, with the cost of fuel and electricity top of mind.

Confidence has dropped to levels last seen in December 2020 in the depths of the pandemic, according to a survey released on Friday.

Fuel price concerns are higher than six months ago, despite tax relief at the bowser, and remain a more pressing worry than COVID-19, the MYOB survey of 1000 small and medium businesses shows.

MYOB executive Emma Fawcett says business owners are facing a "cost of doing business crisis".

She says the cost of living is a concern for businesses and consumers alike, and poses a threat to the recovery of Australia's 2.3 million small and medium-size businesses - the nation's biggest employer.

Small businesses are also expecting to pay their staff more, but few expect to increase the size of their teams.

Confidence in the economy has dropped overall, with 41 per cent anticipating improvement compared with just more than half (53 per cent) six months ago.

Rural businesses are feeling much less optimistic, with one in four expecting economic improvement.

Gen Y business owners (aged 25-39) are feeling more pressure than baby boomers (aged 55-74).

Younger owners are also less positive about the year ahead, with almost two in five (39 per cent) of gen Y respondents anticipating the economy will improve compared with almost half (45 per cent) of baby boomers.

Men (45 per cent) are more optimistic that women (39 per cent).

Victorian businesses are the most confident about the economy, with almost half believing it will improve, ahead of NSW and South Australia (both at 40 per cent) and Queensland and Western Australia (both 37 per cent).

Transport, postal and warehousing is the most optimistic sector, while manufacturing and wholesale has highest anticipation of decline.

Those whose businesses were created during the ups and downs of the pandemic are feeling more hopeful for the year ahead.

Some 55 per cent of start-ups anticipate their revenue will rise, compared with just more than a third (34 per cent) of businesses five to 10 years old and and 27 per cent of firms operating for more than 10 years.

Finance and insurance business owners are the most likely to have increased profits.

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