November2022 BusinessNeedsSurvey2022 GreenGlobalConnected TheCounciloftheCityofSydneyacknowledges theGadigaloftheEoraNationastheTraditionalCustodiansofourlocalarea. WeacknowledgeElders pastandpresentandcelebratethediversityofAboriginalandTorresStraitIslanderpeoplesandtheirongoingculturesandconnectionstoCountry. Contents 01.ExecutiveSummary4 02.KeyInsights5 03.EconomicOverview6 04.BusinessTrends11 05.BusinessNeeds16 06.AnalysisofKeySectors20 07.AnalysisbyArea28 08.Conclusion33 09.Methodology34 DocumentInformation CityofSydneyBusinessNeedsSurvey2022 PublishedOctober2022 Author: BISOxfordEconomics,level6/7MacquariePl,Sydney,NSW2000(02)84584200 Frontcoverimage:Petal&Fern,PottsPoint,2020Photo:KatherineGriffiths/CityofSydney Thankyoutoallthebusinesseswhoparticipatedinthe2022BusinessNeedsSurvey. Foranyenquiriesaboutthisdocument,ortosignuptoreceivefuturesurveysandhaveyoursayaboutyourbusinessneeds,pleaseemail:citybusiness@cityofsydney.nsw.gov.au ThisreportcontainsfindingsoftheCityofSydney’sthirdannualBusinessNeedsSurvey.Thesurveyranbetween8Augustand18September2022andwasdistributedwidelytobusinessesacrosstheCityofSydneylocalgovernmentarea(LGA)throughallCityofSydneymarketingchannels,industryandcommunitybodiesandkeybusinessstakeholders.Thesurveyreceivedato-talof564completeresponsesandtheresponseswereweightedagainsttheCityofSydneyFloorSpace&EmploymentSurvey2017toensureindustrysectorproportionsreflectthedistributionoftheoverallbusinesssectormix. Datafromsecondarysourcespresentedinthisreportwasvali-datedinOctober2022.PrimaryCityofSydneyBusinessNeedsSurveydataisuptodateasattimeofpublication.Whileallcareistakentoensureahighdegreeofaccuracy,thecontributorsacceptnoresponsibilityforanyinjury,lossordamagearisingfromtheuse,errororomissionstherein.UsersareinvitedtonotifytheCity’sBusinessteamofanydiscrepancies. 3 ExecutiveSummary TheannualBusinessNeedsSurveyisacriticalsourceofinformationtosupportthedecisionsandprogramstheCityofSydney(the‘City’)developsinsupportofitslocalbusinesses.TheCityfirstconductedtheBusinessNeedsSurveyfollowingthefirstlockdowninitiatedinresponsetotheCovid-19pandemicin2020. Thesurveyaimedtoprovideinsightintotheneedsofsmallbusinessoperatorstodeterminethebestapproachinsupportingthemtoremaineconomicallyviable. Thesurveysconductedin2020and2021havedirectlyinformedactivationinitiativessuchastheAlFrescocityoutdoordiningprogram,CBDActivationGrants,PrecinctActivationGrants,redtapereform,andcapacitybuildingprogramslikeRebootWebinarSeriesandtheBusinessInnovationProgramSeries. The2022BusinessNeedsSurveywasopenfromAugusttoSeptember2022andwethankthe564businesseswhoresponded.Thepurposeofthisreportistocommunicatethe2022surveyfindingswithinabroadereconomiccontextandtohelplocalbusinessesidentifyemergingtrends,challengesandopportunities. Thekeyfindingfromthisyear’ssurveyisasurgeinbusinessconfidencerelativetotheprevioustwoyears.Threeineveryfourrespondentsexpecttheywillbefinanciallybetteroffin12months–asignificantjumpfromthe2021surveywhereonlyhalftherespondentsshowedsuchconfidence.What’smore,respondentsaremuchmoreoptimisticabouttheirownfuturethanthatoftheAustralianeconomyasawhole. ThisresultreflectsthechallengingmacroeconomicoutlookinAustraliaandthecity.Risinginterestrates,fallinghousepricesandhighinflationareexpectedtoconstrainfuturespending.However,thereturn ofinternationalvisitors,studentsandworkerswillhaveanoutsizedimpactontheCity–particularlythepartsoftheCitystillsufferingfromlingeringCovid-19constraints.ItshouldalsobenotedthatbusinessesthatstruggledthemostthroughtheCovid-19pandemicmaynothaveremainedopenedandthereforearenotcapturedinthe2022BusinessNeedsSurvey. TheCity’seconomyasawholehasnowrecoveredtopre-Covid-19levels.However,therecoveryhasbeenunevenacrosssectors.Office-basedsectorssuchasfinanceandprofessionalserviceshaveledtherecoverywhilemanybusinessesinconsumer-dependentsectorshavecontinuedtostruggle.ThissplitisevenmorepronouncedintheCBDwhereanincreasinglypersistenttrendtowardshybridworkinghasloweredfoottraffic. Businessneedshavechangedinlinewithchangesinthebusinessenvironment.Whileadesireforadditionalbusinessgrantsremains,theneed hasrecededrelativetothe2021surveyandisconcentratedamongstsmallbusinesses.Onamoregranularleveltheneedsofbusinessesarebroadlysplitbetweenoffice-basedandconsumer-dependentbusinesses.Office-basedbusinessestendtodesiresupportinfindingskilledworkersandreducingredtapewhileconsumer-dependentbusinessesseekgreaterlevelsofprecinctactivation. Businesseshavebeenbusyimprovingtheirofferings.ThreeoutoffourbusinessesintheCityhaveexpandedatleastoneaspectoftheirdigitalservicesinthelastyear-halfofallrespondentsplantofocusonsocialmediamarketing,customeracquisitionandretentionoverthenext12months.Strategicplanning,businesscontinuityandresilienceinitiativesfollowcloselyintermsofpriorityasbusinessesseektoadaptandthriveinaneraofuncertainty. BusinessNeedsSurvey2022 4 KeyInsights EconomicOverviewBusinessPerformance CityofSydneyGrossRegionalProduct(GRP) JobIndex Only ofbusinessesaretradingabovetheir SinceDec2019