Executive Outlook is known as the “most comprehensive and insightful study of the region” (for our 12th year running). We’ve interviewed 65 business leaders so far. Here’s what we’ve found.
Confidence
Confidence is bouncing back (revenue’s sporadic, margins are tight and we’re adapting as we go, but the heartbeat’s back). 45% of business leaders are optimistic, tempered by high levels of uncertainty.
This crisis is indiscriminate. Good businesses have suffered, which was also reflected in results. 38% of business leaders are neutral about prospects and 17% are concerned. Navigating the pandemic, recession and global headwinds has kept us on our toes. The good news is most economists tip our economy to grow in this quarter.
Overall, our conversations with business leaders are upbeat about where they’ll be in three months. We’re grateful for JobKeeper, but concerned about the removal of this scaffolding.
For others, recovery has thrown up opportunities to take the brakes off and grow market share, based on reputation and “good old fashioned service”. There’s a sense of “Why waste a good crisis when there’s a silver lining”. This one has presented opportunities to slash travel expenses, cut costs and lean on technology like never before, so, despite revenue drops, profits have broadly held their own.
Top challenges
The top challenge for almost a third of business leaders is sustaining profits, faced with falling demand and tight margins (30%). This was closely followed by cost pressures and regulations.
We’re all on-board with creating a Covid-safe workplace, and thankful for the Government stimulus, but this has been tricky for businesses to manage across the board – we heard this time and again. There’s been a massive investment in technology to work from home, coupled with resources and cleaning to keep workers safe.These issues are front and centre, coupled with the “what ifs” (as we brace for more virus shocks).
“Maintaining profitability, when revenue has been so dramatically reduced, is hard”.
Having a Plan B is one thing, but to get through this, we need a Plan C as well. Start, pick up the pace, pause, step back and go again. It’s still a bit like that right now, and it comes at a cost!
Local cafe owners have Covid plans in place, so customers feel safe in their venue. They are grappling with reduced dine-in capacity and price hikes (sanitising, deep cleaning and contact tracing don’t come cheap), and our survey reflected this.
“We strictly follow Covid restrictions. It takes a lot of time, effort and money to get that right”.
Anecdotally, there’s talk of rising bad debt levels, and the robust cash flow management it takes to minimise these credit risks (across the board).
“Debtors are dragging out and spend is down. Clients are in a state of flux”.
The agricultural sector is struggling with competitive international markets and a shortage of cattle from a prolonged drought. China’s tariffs and anti-dumping measures on wine, barley and beef exports are also hurting farmers.
It’s patchy in the construction sector, but business leaders are positive about the outlook, with strong growth in infrastructure and retirement living. Their main challenges are razor-thin margins, competition, regulations and new technology.
We interviewed leaders from the local tourism sector, which has seen dramatic dips and peaks, linked to location and pockets of outbreaks. In August, occupancy rates for the City sat at 15-20% (as opposed to the normal average of 80%). This reflects a clear drop in corporate travellers.
In an exclusive “Ipswich Today” Podcast, Allan Roebuck interviews our founder, Jan Gadsden, on Executive Outlook’s survey results on local business conditions. Thanks for this opportunity, Allan, to connect and find ways to support local businesses in these unusual times. We’ve interviewed 65 business leaders so far. Confidence has bounced back (revenue’s sporadic, margins are tight and we’re adapting as we go, but the heartbeat’s back). 40% of firms reported skill shortages, and our findings on remote work opens a can of worms. Listen to the podcast.
To find out more about Executive Outlook’s research into local business sentiment, reshaping what we do, remote work and skill shortages, listen to our exclusive “Ipswich Today” podcast interview.
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Compiled by Jan Gadsden, Founder/Director of Top Office Group Pty Ltd.