With a 60 per cent fall in sales and a 65 per cent drop in profits in businesses across the Illawarra business confidence has dropped dramatically in the first three months of 2020.
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The latest quarterly business conditions survey by the Illawarra Business Chamber shows businesses are scrambling to make rapid changes to adapt and survive the economic impact of COVID-19.
Executive director Adam Zarth said the survey conducted between January and March reveals the extent of the impact multiple economic shocks have had on the regional economy.
Mr Zarth said Illawarra business owners have been forced to make rapid changes during a fire ravaged summer followed hot on the heels by COVID-19.
He said the new survey showed the transition from early-phase impacts relating to supply chain interruptions and reduced overseas visitor arrivals to the full-scale economic crisis with the coronavirus.
And how business conditions have deteriorated rapidly with a doubling of COVID-19 related revenue losses.
Businesses have had to enter hibernation with significant adjustments to staffing levels and capital spending.
Mr Zarth said it was clear that some won't make it through.
"The impact of COVID-19 on confidence is most apparent when examining business expectations for the next quarter where confidence has fallen at an unprecedented rate," he said.
"In the Illawarra, 60 per cent of businesses have reported falling sales revenue and 65 per cent of have reported falling profit.
"We have seen marked changes in capital spending and staffing, with 42 per cent of businesses reporting lower levels of investment and 21 per cent decreasing their staffing profile.
"In the space of four months, businesses in the Illawarra have shifted their focus from expanding their capacity to meet demand to seeking to remain solvent and downsizing".
Mr Zarth said many businesses have however indicated an ability to keep the doors open in some circumstances.
"75 per cent of businesses have indicated that they will be able to continue operating; many with a significantly reduced capacity (45 per cent) while others may be largely unaffected (22 per cent)," he said.
"It is critical that every tier of government do all that is possible to keep businesses in operation and staff employed.
"When given the all clear to resume normal business operations, we need to be in the best possible position to do that as quickly as possible".
Mr Zarth said the survey results came as no big surprise.
He said all the trends were consistent with what the chamber has been observing in recent weeks through daily engagement with businesses.
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