- More than half of real estate firms expect to be hiring in the next six months
- Construction and real estate businesses are expecting revenues to rise
- Skill shortages are looming in construction
Real estate and construction businesses are among the ‘most confident’ small businesses in Western Australia as they move in 2021, a new Bankwest Curtin Economics Centre report has found.
The report, Back in Business? WA small businesses and the impact of COVID-19, represents a snapshot of WA’s small businesses, with new data collected to gauge the impact COVID-19 has had on small businesses in WA, whether they need greater support and how they viewed the future outlook at the end of 2020.
Report co-author and Bankwest Curtin Economics Centre Deputy Director Rebecca Cassells noted that there are 230,000 small businesses operating in WA alone, employing over half a million workers.
“COVID-19 has had a detrimental impact on the world and its economy, but this financial pressure is often felt more severely by small businesses which have fewer resources to draw on,” Associate Professor Cassells said.
“Coming into 2021, WA small businesses had a much more positive outlook for the year, with more than a quarter of small business owners expecting to employ additional workers over the next six months and only four per cent intending to apply for JobKeeper – down from 50 per cent in 2020.
“Revenue expectations were also high, with 37 per cent of small businesses expecting revenues to increase in the first half of 2021. This was especially the case for businesses in the construction and real estate sectors, but also those operating in hospitality and the arts.”
Associate Professor Cassells explained that this could all be quickly unravelled if shutdowns persist, hurting business and consumer confidence and weakening WA’s economic recovery trajectory.
“Almost 37 per cent of WA small businesses reported revenue losses due to COVID-19 in 2020. For many, the revenue impacts were severe with one in four businesses reporting revenue down by more than 25 per cent compared to the same time last year,” Associate Professor Cassells said.
“What we do know is that support measures such as JobKeeper, the ATO cash-flow boost and payroll tax relief were reported as being most helpful for small business owners during the 2020 COVID-19 lockdowns. These are important supports and give small businesses the ability to maintain operations and pay workers and other costs without any revenue coming in due to closures.”
Report co-author and Bankwest Curtin Economics Centre Director Professor Alan Duncan said that small businesses are also continue to face unnecessary stress due to late payments from larger companies.
“Our findings show that almost a quarter of WA small businesses face late payments of more than 30 days or more from larger firms, placing additional and unnecessary stress on small business owners, restricting cash flow and the ability to operate,” Professor Duncan said.
Professor Duncan explained that there are also a number of ongoing issues that continue to impact small business owners such as lower quality infrastructure and skills shortages, especially in regional WA.
“We found that 38 per cent of WA small business owners, including 51 per cent in the accommodation and food services and manufacturing industries and 44 per cent in the construction sector, said it was harder to access labour compared to a pre-COVID economic climate,” Professor Duncan said.
One of the main proposals put forward this week by the Property Council sought to address skill shortages.