CreditorWatch Chief Economist Anneke Thompson says:
“The ABS has released their final Business Conditions and Sentiments survey. The survey results give us some indication of upcoming inflation and economic conditions. Almost half (46 per cent) of businesses reported that their operating expenses have increased. This is an increase in 21 per cent of businesses who reported this in June 2021. And cost increases are expected to continue in the near term, with 44 per cent of businesses expecting operating expenses to increase. Supply Chain disruptions remain a major source of frustration for businesses, with 41 per cent of businesses reporting issues.
Almost a third (31 per cent) of businesses reported difficulty in finding staff, with larger and medium sized businesses having the greatest issue. Those industries that have recently reopened after Covid-19 shutdowns – accommodation and food services, education, and training – are reporting the most difficulty in finding staff.
The data indicates that there will be continued difficult operating conditions for the sectors who is at the top of CreditorWatch’s Probability of Default rankings. This is the Food & Beverage (7.1 per cent) sector. This sector will also be currently grappling with higher energy costs, higher labour costs as a result of the Fair Work Commission’s announcement last week, as well as reduced demand as consumers wind down their discretionary spending.