The Middle East crisis impact is continuing to flow through Australia’s economy, with 95% of the nation’s businesses feeling some effect.
An Australian Chamber of Commerce and Industry (ACCI) survey – together with state chambers including CCIWA – asked almost 2,300 businesses between March 24 and April 2 how higher fuel costs and supply uncertainty had affected their business.
The national findings show a similar picture to CCIWA’s recent snap WA business confidence survey, which was conducted the week prior.
| Australia | Western Australia | |
| Fuel costs impacting business at some level | 95% | 92% |
| Severe of significant impact on business | 46% | 31% |
| Increased transport/freight costs | 69% | 84% |
| Higher supplier costs | 43% | 83% |
| Increased energy costs | 17% | 54% |
Nationally, businesses also reported planning or pricing difficulty (45%), cashflow pressure (44%) and reduced customer spending (43%).
ACCI CEO Andrew McKellar said businesses were definitely feeling the pinch.
“The announcement of a ceasefire this week came with great relief, but just a day later that was all thrown into doubt, showing just how fragile this situation is,” McKellar said.
“Businesses will remain on edge until there is a clear and lasting end to the conflict.
“Even if hostilities pause, disruptions to oil supply will have lasting consequences in many industries.”
How Australian businesses are responding
The crisis has prompted businesses to reduce operating costs wherever possible, including:
| Australia | Western Australia | |
| Absorbing higher fuel costs | 61% | 56% |
| Reducing non-essential spending | 55% | 47% |
| Reviewing staff levels or operating hours | 45% | 28% |
| Passing costs onto customers | 37% | 44% |
Changing business practices (38%) and delaying investment/expansion plans (31%) were also common cost-management strategies among Australian businesses.
“The Federal Government’s measures, including halving the fuel excise and cutting the heavy vehicle road user charge, have already provided some relief,” McKellar said.
“If the conflict resumes and conditions deteriorate significantly, the Federal Government will need to consider cashflow support to ensure businesses can continue operating.”
CCIWA is monitoring the fuel situation and business impacts closely. See our Middle East Crisis Hub for updates, practical resources, advice and support available from CCIWA.
Become a CCIWA Member to ensure you access our business support services and receive the latest updates and information to help your business through this crisis. Contact us via [email protected] or on 1300 422 492.
