New research from Fishbowl Inventory, conducted by Primara Research using ABS Business Conditions data, collected for the first time in four years, reveals that 1 in 6 Australian businesses are still experiencing supply chain disruptions.

Agriculture leads all sectors with 42% of businesses still experiencing supply chain disruptions, more than double the national average, with the pressure passing through to retail trade at 31%. The cost pressure sits primarily upstream, before goods reach retailers.

Across agriculture, manufacturing, wholesale trade, accommodation and food services, and retail trade, more than 85% of businesses report fuel price impacts, with freight and delivery costs close behind, creating a compounding burden at every stage of the supply chain.

“Agriculture and manufacturing are carrying a 90%-plus fuel cost burden and an 80%-plus freight burden simultaneously,” said Peter Drennan, Head of Research and Data at Primara Research.

“Those costs have to land somewhere, and right now they are landing on business margins, not consumer prices.”

Price impact yet to reach consumers

The research found only 11% of businesses have raised prices so far. A further 48% are absorbing costs entirely, meaning just 20% of the true cost burden has reached consumers. The 48% absorbing costs have, to this point, acted as a buffer for Australian households, but that buffer has limits.

Revenue has already declined for 36% of businesses over the past four weeks, from wholesale trade (48%) through to accommodation and food services (53%). Among wholesalers, 53% expect revenue to fall again next month.

“Margins get compressed until they can’t be,” said Mr Drennan. “53% of wholesalers expecting a further revenue decline next month tells you the buffer is running out. Prices have to move.”