The impact of the Gulf crisis is hitting WA businesses across all sectors and sizes, according to a snap survey by CCIWA.
“This reaches into virtually every business, whether it’s through fuel costs, supply challenges or the increased costs being passed on from suppliers,” CCIWA CEO Will Golsby said.
“Our survey produced some very alarming results, with some businesses saying the current crisis could force them to close their doors.
“The longer this drags on, the worse it will be for WA businesses and the broader economy.”
The survey found fuel shortages had directly impacted almost half (45%) of businesses, while 31% described the impact as “significant” or “severe”. Only 7% had experienced “no impact”.
Businesses said freight costs were expected to double, customers had been cancelling orders and some were winding back operations.
“This is probably the nail in the coffin for our business,” a respondent said.
Sectors of greatest concern
The survey indicated agriculture was experiencing the greatest impact, with 74% reporting a “severe” or “significant” impact from increased fuel, fertiliser, chemicals and freight costs.
The health and disability care sector was also hit, with higher costs of delivering at-home care affecting 56% of businesses.
Golsby said a slowdown in consumer spending was also a concern.
“The significant hit from fuel prices to household budgets will begin to flow through to consumer behaviour,” he said.
“Businesses in the hospitality, tourism and retail sectors are likely to be the first to see these impacts and we’ve heard from businesses in tourism that they are bracing to experience impacts over the Easter holidays.
“This will deliver another blow for regional communities in WA.”
How businesses are responding to the crisis
Businesses reported various ways they would navigate the situation, with most (56%) forced to absorb the extra costs, while 47% planned to reduce non-essential spending and 44% passing costs on to consumers.
Businesses were also considering workplace changes, with 25% planning to review staffing allocations and 11% said staff had requested extra work-from-home days.
Golsby welcomed the State Government’s strong focus on coordinating fuel supply and distribution with industry and the Federal Government. But said more would need to be done to ease the pressure on businessesand the community, given costs were likely to stay high for some time.
“All levels of Government – local, State and Federal – need to look at things like fees and charges over the medium term to ease some of the pressure on businesses to help them support the economy and stay afloat,” he said.
CCIWA is monitoring the fuel situation and business impacts closely.
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