Businesses are urging the state government to reconsider plans for a Friday public holiday before the AFL grand final, as a survey of employers reveals three-quarters intend to close for the day to avoid the extra wage bill.

Highlighting the significant economic impact of the holiday, a survey by the Australian Industry Group found eight out of 10 Victorian manufacturers and more than seven out of 10 services and construction businesses plan to shut their doors for the day, costing the state economy at least $1 billion.

Illustration: Matt Golding.

That suggests about 158,000 companies will be closed for the day. A further 31,000 will stay open but will cut staff or their opening hours.

Ai Group Victorian director Tim Piper said the research highlighted the damage inflicted on Victorian business. On average, businesses that will not open will lose $15,800 in sales while still having to pay $9000 in wages. Those that will open expect to spend an average of at least $6700 extra on penalty rates.