Private Business Barometer 9Listening to Australia’s private businessesMay 2011Now featuring the Private Business Barometer Pulse
About UsMedia CentreCareers

Findings

Impacts of the natural disasters


Surveys for this issue of the PwC Private Business Barometer started soon after flooding and Cyclone Yasi devastated Queensland and other parts of Australia. We asked respondents from other states and territories a range of questions to measure the impact of these disasters on private businesses outside Queensland.

Private businesses split on levy


Thirty-nine per cent of private businesses agreed with the thenproposed Federal Government levy to help rebuild flood-affected infrastructure. Fifty per cent of private businesses did not support the levy and 11 per cent were not sure.





Businesses concerned about financial position


One fifth (19 per cent) of private business owners or managers who did not support the levy were concerned about their own financial situation. A similar percentage (18 per cent) believed there were already sufficient funds available from tax revenue and government reserves to help affected communities.




Half of non-Queensland businesses feel impact


Half (51 per cent) of Australian private businesses outside Queensland felt the impact of the natural disasters. Twenty-two per cent experienced a decrease in demand for their products or services and 15 per cent said their supply chain had been affected. On the other hand, 10 per cent experienced an increase in demand for their products or services.

While we did not interview Queensland-based private businesses for the May 2011 PwC Private Business Barometer, we measured the impact of the natural disasters and the sentiment of Queensland businesses through surveys, events, roundtable focus groups and other relationship activities.

Our Master of Business interactive survey of approximately 100 Queensland business owners, conducted in March 2011, found one-third of respondents were affected by the natural disasters. Similarly, 29 per cent of businesses expected the Queensland economy to feel the effects of the disasters for the next 12 to 18 months.

Despite these potential setbacks, many private businesses showed the ‘Queenslander’ spirit and remained confident they could grow their sales and profitability over the coming 12 months.




Many Australian private businesses pitched in to help those affected by natural disasters. Over half of respondents (59 per cent) supported those impacted by donating or volunteering. Eighteen per cent of businesses responded by showing commercial flexibility and nine per cent offered wellbeing support. Only a quarter of businesses provided no support to those impacted.









Queensland businesses look ahead for growth opportunities


In this edition of the PwC Private Business Barometer we captured the opinions and insights from Queensland private businesses at a Master of Business event in March and at a roundtable session in April. Private businesses are now four months into their recovery and what we’ve found is that the emphasis is on long-term, not short-term recovery and growth.

Private business guests who attended a roundtable discussion in April were:

  • Allan Todd, Managing Director, Todds Hi Fi, a sound and vision retailer
  • Ron Higham, Company Director of five unlisted companies
  • Kevin Davis, Managing Director, Austech Industries Pty Ltd, tools and equipment wholesaler
  • Chris Eldridge, Chairman, 4 Impact, a project services consultancy
  • Craig Davison, Managing Director, The Outdoor Furniture Specialists
  • Melanie MacDonald, Director, Koringa Business Investments, private investor in online educational training and property.

From our discussion with private business owners at the roundtable session, we learnt that most were not in favour of a flood levy to support rebuilding infrastructure. Overwhelmingly, private business owners felt that the recovery should be funded by the Federal Government to prevent a slowdown in the economy. Likewise, the majority of private business owners in other states and territories supported the use of a budget surplus to fund the recovery and 50 per cent do not agree with the introduction of a levy.

More than half of the Queensland-based private businesses we spoke to have been impacted by the natural disasters. The outlook for growth is modest, particularly in the retail sector where competition from new businesses and overseas competitors has put pressure on their sales, product supply and growth outlook. The larger overseas retailers are placing particular pressure on local suppliers.

The responses in the People section of this edition of the PwC Private Business Barometer correlate with what Queensland private businesses told us. Queensland businesses, like their counterparts in other states and territories, find that attracting and retaining talent is a fundamental challenge.

Employees are now more agile and prepared to change jobs, so employers must look for different ways to retain key staff. Similarly, finding talented staff is also a challenge for private businesses.

“The biggest challenge in the next 12 months will be finding good staff and empowering them while also making the business a destination customers want to shop,” said Craig Davidson.

Queensland private businesses told us that they are facing similar people, funding, pricing and sales growth challenges highlighted in the PwC Private Business Barometer. Due to the impact of the flooding and Cyclone Yasi, private businesses in Queensland are cautious in their short-term approach and optimistic about longterm growth. They are looking at ways to ensure their businesses continue to grow and are exploring options to compete by buying better, retaining customers and promoting their brand.		“New retailers are moving into Australia,” said Kevin Davis. “If Australian suppliers don’t engage them, buyers have options. In some cases they may turn over more of their product in North America than the Australian operation turns over here. They could, if they chose to, just bring containers in themselves from their overseas operations.”

The insights provided by the group at the roundtable on e-retailing align with the results in the PwC Private Business Barometer. Although private businesses acknowledge there is an opportunity in this market, they are also very wary of the threat it represents. Businesses are facing increasing pressure from overseas competitors, particularly in electronics.

“One of the problems is the erosion of the value of the product by overseas competitors,” said Allan Todd. “It is amazing how many $500 televisions from China are sold when you can buy a Panasonic for $800.”

During the global financial crisis, private businesses were cautious about taking on debt but now they are looking back to the banks for funding. Private businesses are looking for a partnership with their bank, not simply a transactional relationship. They are looking for a partner who will support the business growth and journey from a start-up to a medium or large enterprise.