Last week we asked you, our readers, about how the ongoing Covid-19 pandemic is affecting your business. The PKN Pulse survey, conducted in partnership with Matthews Australasia, gives some insight into the current state of the Australian manufacturing and packaging industry.
Nearly all respondents said Covid-19 had affected business, with 90 per cent saying the pandemic had affected operations. Sixty-three per cent of all respondents said it has had a positive impact on operations, while 27 per cent said it has had a negative impact.
How much has the virus affected business? On a scale of one to 10, with 10 being “significant impact”, the average score was 6.3, meaning the virus has had a moderate impact. However, 18 per cent of respondents gave a score of 10 out of 10.
In a similar question, we asked how companies’ production volumes had been affected by the pandemic, and 58 per cent of respondents said they had been positively affected, with 23 per cent saying volumes had been negatively affected. The remaining 19 per cent saying production volumes had been neutral.
In a comment, one respondent said, “Production volumes increased by demand”.
Another said there had been “increased demand for ‘critical spares’ and companies ordering 'buffer stock' in anticipation of potential delays.”
But another respondent said, “A lot of our supply sees a 12-week lead time, so we are yet to see a full impact on supply. We are surely nervous.”
Staff health and wellbeing was cited by the most respondents as their top concern, with 40 per cent saying it was their top concern looking forward. Supply-chain issues was cited as the top concern by the second largest group of respondents (24 per cent) followed by funding/capital issues (16 per cent), lack of information to inform decisions (9 per cent), impacts due to reduced exports (7 per cent), and lack of a comprehensive emergency preparedness plan (4 per cent).
Less than one third of respondents (29 per cent) said they would not take advantage of the Australian government’s FY 2020 $150,000 instant asset write-off opportunity. Thirty-one percent of respondents said they were planning to us the write-off, and 40 per cent indicated that they might.
As part of the government’s colossal stimulus plan, any business with a turnover of up to $500 million can take advantage of the $150,000 instant asset write-down on newly purchased equipment, but they must do so by the end of this financial year.
The pandemic is having a negative impact on capital projects and purchases, the survey showed. When asked how planned capital projects or purchases had been impacted by the pandemic, the average response was 4.2 out of 10 (with 0 being significantly reduced, and 10 being significantly increased).
Just 20 per cent of respondents said their planned capital projects and purchases would increase in the next 12 months.
This PKN Pulse survey was conducted by PKN during the week of 23 March 2020. The results are based on 48 responses.