New research1 released today from the Commonwealth Bank (CBA) shows that one in three small businesses are anticipating a drop in consumer demand and many are yet to feel the full impact of the increasing cost of doing business.

Of those small businesses surveyed, the primary concern is an anticipated drop in consumer demand (36%), with inflation and other pressures expected to affect consumer spending. This was followed by the cost of business insurance (31%) and transportation and logistics costs (28%).

The research shows that small businesses are more prepared than ever, with many poised to act and recognise the need to adjust if the anticipated drop in consumer demand occurs.

One-third of businesses (33%) have already reduced spending on non-essentials, another one-third (32%) have adjusted personal spending, while (27%) are being more disciplined around budgeting and expense tracking.

CommBank’s Group Executive, Business Banking, Mike Vacy-Lyle said: “While inflation is creating challenges for many small business owners, the sector remains focused on being prepared. Australian entrepreneurs continue to show considerable grit and we are reminded of the amazing resourcefulness shown during Covid.

“We’re seeing customers respond in pragmatic ways by making adjustments to their operations in response to an anticipated reduction in consumer demand."

Compared to consumers, small business owners continue to show lower levels of concern about the rising cost of living, but the proportion that are feeling the impact has increased since October 2022 when the survey was last conducted (+1%). While 20% (+4% vs Oct) report an operational impact, 23% (+5% vs Oct) report an impact on finance.

“We encourage our customers who experience financial difficulty to reach out for support early. CBA banks more than one in four of all businesses and we are here to support this important part of the Australian economy by offering personalised support and flexible loan structures to help at every stage of the businesses’ life,” added Mr Vacy-Lyle.

Notes to Editors

Detailed findings of the February 2023 survey are below:

  • Despite challenging conditions, small business owners report feeling a range of emotions, both cautious (36%) and uncertain (31%), but also optimistic (27%) and determined (24%).
  • The latest data shows incremental increases in the proportion of small businesses who are reporting being impacted by the rising cost of living – behaviour is consistent with Oct 22.
  • The top behaviours continue to be:
    • Reducing spend on non-essentials: 33%
    • Adjusting personal spend: 32%
    • Increasing prices: 30%
  • Higher turnover businesses ($1M - $5M) are the only cohort with elevated concerns compared to Oct 2022. Their main concern is reduced demand but 26% are also concerned about workforce retention.
  • 17% of small-to-medium enterprises have not yet made any changes to their operations. These are more likely to be smaller operations (<$1m turnover, sole traders) who have longevity (57% been in business over 10 years).

For more information on CommBank’s support for small businesses, visit:

1CBA commissioned fiftyfive5 research in February 2023, national sample size of 508 small business owners with up to $5m turnover.

Disclaimer: Media releases are prepared without considering an individual readers objectives, financial situation or needs. Readers should consider the appropriateness to their circumstances. The statistics referenced in this article is data sourced from a survey of 510 small business owners that occurred in October 2022. The survey was also undertaken by fiftyfive5 research on behalf of the Commonwealth Bank.  Any opinions, conclusions or recommendations set forth are subject to change without notice.  View our Group Privacy Statement at  Visit Important Information to access Product Disclosure Statements or Terms and Conditions which are currently available electronically for products of the Commonwealth Bank Group, along with the relevant Financial Services Guide. Target Market Determinations are available here. Applications are subject to approval. Interest rates are correct at the time they are published and are subject to change. Fees, charges and eligibility criteria may apply.

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