Despite lockdown Victorian businesses more positive about state’s economy

Melbourne businesses are twice as optimistic as they were a month ago when it comes to what they think the Victorian and Federal Government economies will look like in 12 months.

Melbourne VirusAccording to the September Sensis Business Index, 35% of Melbourne businesses believe the Victorian economy will be better in a year compared with 17% when they were asked the same question last month.

And on a national economic perspective, 26% of Melbourne businesses said the economy will be better in 12 months compared to 14% last month.

Sensis CEO John Allan said he was surprised at the optimism.

“Melburnians have been in lockdown for more than 80 days which is longer than the 77 days in Wuhan.

But despite that they still have belief in both the Victorian and Federal economies bouncing back.”

Mr Allan said that the optimism on the national economy had changed little in a month but every state was more positive except Hobart.

What is the view of your state’s economy in 12 months?



The economy – one year on, what does it look like?

56% of Australian businesses say the national economy will be worse in a year than what it currently is.

Canberra businesses were the most pessimistic at 66% followed by Melbourne at 62% and Adelaide at 60%.

Perth was the most positive at 50%.

To highlight the two-speed economy in Melbourne 62% said the economy would be worse in 12 months but 26% (the most of any state) said it would be better. That compared to a national average of 19%.

This was further reflected when businesses were asked about their state’s economy over the next 12 months. 59% of Melbourne businesses said under the Andrews Government the Victorian economy would be worse in a year but 35% saying it would be better.

Sydney businesses were not as pessimistic as Melbourne with 49% saying it will be worse with 22% saying it would be better. Perth was the least pessimistic with just 27% saying the WA economy would be worse against the national average of 45%.

Industry wise, 71% of health-related businesses said the economy would be worse – by far the highest figure. Hospitality and Retail were both at 53%.

The Hospitality sector was expecting to jump back with 30% saying the economy in one year would be better – the highest of any sector.

44% of businesses would not have survived without JobKeeper

The impact of Federal Government’s JobKeeper scheme should not be under-estimated with 44% of Australian businesses saying they would not have survived without it.

The research, undertaken by data insights platform Glow of 500 businesses nationwide shows:

  • 65% of Hospitality businesses would not have survived
  • 62% of Melbourne businesses would not have survived
  • 56% of Canberra businesses would not have survived
  • 54% of Construction businesses would not have survived

Mr said the research showed each state was affected differently and it also depended on what sector a business was in.

Employment“Overall it was 44% but when looking at it from a state perspective it was way more important in Melbourne at 62% compared to Hobart for example which was nearly half of that at 33%,” Mr Allan said.

“When you look at it from an industry perspective Hospitality was at 65% Retail at 42% but only 30% in Construction.

“A lot of industry experts were saying that perhaps JobKeeper should have been tiered. As you can see some sectors are less affected and a business down 30% is probably going to survive but a business like those in the travel sector who are down 100% probably won’t and the closures show that.”

The survey also asked businesses about how important JobKeeper will be over the coming months with 47% of businesses saying it was critical.

“The biggest difference was comparing Melbourne to Sydney with a massive 78% of Melbourne businesses saying it was critical but just 31% in Sydney. That is a vastly different outlook,” Mr Allan said.

“Looking at it from an industry perspective JobKeeper moving forward is most critical for Culture and Recreation at 63%, Transport at 62%, Hospitality at 59% and Retail at 42%.”

Border closures

The survey also looked at the impact on businesses of the border closures.

40% of businesses said border closures were having no effect on their business, 40% said somewhat and 20% said it as having a major impact.

Adelaide was least impact with 53% (the highest) saying no impact and 11% (the lowest) saying a major impact.

Contrast that with 28% of Melbourne businesses saying it had a major impact with 24% saying it had no impact. Sydney businesses were also being affected with 26% (just behind Melbourne) saying the border closures were having a major impact.


Getting finance approved in the past month has been a massive issue in Melbourne with the survey reporting that 36% of Melbourne businesses had been turned down.

It was not much better in Adelaide with 33% turned down. In Sydney it was just 17%.

Melbourne“It is also appears to be taking longer to get finance approved with it being a major issue in Canberra with 40% of businesses still waiting on approval compared to the national average of 13%.,” Mr Allan said.

“The survey also showed that 30% of businesses said they would access their savings if the needed money over the next three months, with 18% using a credit card, 12% an overdraft and 27% a bank loan.”

34% of businesses said it had been more difficult to get finance compared to pre Covid-19, with 13% saying it was easier.

55% of businesses said cash flow was worse under Covid, with 12% saying it was better and 32% no change. 92% of Hospitality businesses said cash flow was worse. 31% said they had not paid bills on time.

79% of businesses said they had paid invoices on time during Covid with 21% (more than one in five) saying they hadn’t.

Confidence levels over the next six months

Hobart businesses are the most confident when it comes to the next six months with 21% Extremely Confident (nearly double the average of 11%) with just 4% Extremely Worried (compared to the average of 10%).

The majority of businesses (37%) fell into the Fairly Confident category, with Melbourne, as expected, way down on just 28%.

Melbourne City Victoria Australia20% of businesses are Fairly Worried about the next six months and 10% Extremely Worried.

Melbourne businesses over indexed with 26% Fairly Worried and a massive 19% Extremely Worried – almost double the national average.

There were some wild variations when it came to industries with, for example, 23% of Wholesale businesses Extremely Confident about the next six months compared to just 5% in the Culture and Recreation Sector and 6% in Transport.

The Hospitality sector is not expecting a bright six months. 39% are Fairly Worried (against the national average of 20%) and 14% Extremely Worried (against a 10% national average).

13% of Retail businesses said they were Extremely Worried.

Overall just over 6% of businesses said they expected to close their business.

Perth (11%) was the most pessimistic followed by Adelaide at 10.6%. Perhaps surprisingly Melburnians had one of the lowest rates – 4.6%.

When it came to industry sectors, 10% of Manufacturing businesses said they would close, with 9% in Health and 9% in Retail.

Hospitality was still resilient at 2.8%.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on


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Kate Forbes


Kate Forbes is a National Director Property Strategy at Metropole. She has 15 years of investment experience in financial markets in two continents, is qualified in multiple disciplines and is also a chartered financial analyst (CFA).
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