After looking through the last 18 months of data, we are able to make evaluations regarding many of the habits that businesses and customers adopted throughout the pandemic. Spending is one such habit that provides us with a lot of information. We can determine customer, business confidence and resilience throughout turbulent times.
The Australian Business Spending Report, included in the overall Business Health and Habits Report of 2021, revealed that Australian businesses continued to show increasing resilience to the economic effects of the lockdown.
Three lockdowns were analysed. Lockdown 1 was from March to May 2020, lockdown 2 from June to October 2020 and lockdown 3 covers June 2021.
Here are a few key points that we have seen.
- Lockdown hit smaller businesses the hardest
- Average spending plummeted after the announcement of the first lockdown, as it did almost everywhere across the globe
- But by mid 2020, a change was seen and by December 2020, spending had increased past pre-pandemic levels
- For most sectors, transaction spend is now higher than it was before pandemic conditions occurred.
Supplier spending was assessed between key suppliers Telstra, Metcash and Symbion. For Telstra, following a 57% spending decrease during the first lockdown, it has yet to recover to the same level. Spending in Feb 2021 is down 64% year on year.
However, Metcash and Symbion are a little different. There was an increase in spending following the first March 2020 lockdown, with trends continuing upwards. This is to an astounding increase of 231% for Metcash in March 2021 year on year.
Transportation spending after taking an initial lockdown hit has climbed to new highs, with the report citing FedEx experiencing a huge increase of 1166% in August, compared to a relatively low average spend in 2020, including pre-pandemic.
Most industries were hit with a sharp drop in spending during the March 2020 lockdown, with property spending the most volatile. Not surprisingly, digital marketing grew each lockdown, but was an outlier in the general advertising industry, with spending down 9% year-over-year.
Specific businesses, such as Zoom, saw spending increase to accommodate for growing customer demand.
We take a keen interest in spending data to understand the trends in Australia’s business economy. It gives valuable insight and allows us to make forecasting models designed to support your business. Let’s look at ways to ensure you are as confident as you can be with your business’s financial health for 2022.