SYDNEY, June 7 (Xinhua) — About 70 percent of Australia’s small and medium enterprises (SMEs) believe that more investment is needed for local manufacturing facilities to relieve supply chain challenges that began during the COVID-19 pandemic, according to a new research from one of the nation’s leading banks.
Figures released by the National Australia Bank (NAB) on Monday showed that businesses with up to 200 employees were generally recovering from the upheaval created by the pandemic but burdening stock supplies remained a for one in four businesses.
The situation is particularly dire for wholesalers with about half the respondents saying they had ongoing difficulties meeting their customers’ delivery expectations or managing their outgoing costs.
Other SME sectors still being badly hit include manufacturing (44 percent), retail (37 percent) and construction (30 percent).
NAB Business and Private Banking Group Executive Andrew Irvine said the findings reflected what he had been hearing from business operators.
“The topic of supply chains has quickly moved from a subject for the boardrooms to something now discussed around people’s kitchen tables,” he said.
“We are all now intimately aware of how fragile our supply chains can be in the face of a natural disaster, health crisis or international incident,” Irvine said, adding that investment in local manufacturing facilities with access to “strong transport infrastructure” was vital to improving SME resilience.
On the positive side, the report noted, businesses had come up with “ingenious” ways to manage sudden supply chain challenges with 38 percent moving to a model where they had multiple suppliers for an item while 27 percent were investing in extra storage to hold more stock and raw products.
Irvine said the situation also impacted consumers who were finding items were no longer available or had to pay more for them as the SMEs pass on their extra running costs.
About 30 percent of SMEs said they had already raised their prices because of supply challenges or were planning to do so shortly.
The research revealed that businesses in the vast but comparatively sparsely populated state of Western Australia (WA) were the worst hit by supply chain obstacles.
Some 35 percent of WA businesses reported still being hamstrung by inadequate supply chains, while their counterparts in the eastern states, which have the nation’s largest cities of Sydney and Melbourne, had about 10 percent fewer supply problems.