The latest Australian Bureau of Statistics has found that at least a third of businesses are expecting to impose larger than usual price hikes over the next three months.
Most of these businesses, 92% of those surveyed, place the blame for this on the rising prices of products and services. 78% of respondents said that it was fuel and energy that were forcing their hand.
The head of industry statistics, John Shepherd noted that some industries are going to be harder hit than others. In the fields of manufacturing, construction, wholesale trade, accommodation and food services, more than half of the businesses asked were expecting to increase prices over the next three months.
The results of this survey delve deeper into the financial situation of the businesses who responded, which give us great insights into the general health and wellbeing of the Australian economy. We here at YBM are taking all of this recent information on board and are hoping that you do as well, in order to feel more prepared about what the next few months will bring.
Almost twice as many businesses saw increases in their operational expenses this May, up from 22% at the same time last year. Since the question was first asked in July 2020, the current percentage, 43%, has been the highest it has ever been.
In addition to this, more than a third of businesses expect further rising costs in June. These operational costs ranged from general costs to fuel and wages.
Unfortunately, revenue has not seen a similar trend. Only 14% of businesses reported an increase in revenue, which is down from 19% in April. An expected or actual increase in revenue was attributed to increased demand and business activity in general.
Small and medium sized businesses were unsurprisingly feeling the brunt of the impact and were more likely to have higher than usual planned expenditure (50% and 39% respectively) over the next three months. This was compared to larger businesses at 25%.
For those businesses that were not planning on increasing their prices over the next three months, the reasons behind this inaction was due to restrictions in what they could do.
46% reported that they were not raising prices in order to retain customers and another 46% said that they had fixed price contracts in place.
So it seems that the pinch is felt everywhere, across all industries with some being hit harder than others. Those who are not rising prices over the next few months are due to their inability to do so, not because of the position that they are in.
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