BOUNCE IN BUSINESS CONFIDENCE DESPITE COST CRUNCH

The State’s peak body for business, Business NSW, released their Quarterly Business Conditions Survey Report today.

Businesses have recorded their highest levels of confidence in nearly two years, but remain concerned about cash strapped customers, insurance and energy costs.

The gradual rise in business outlook has been cautiously welcomed by Business NSW with business confidence levels coming off an historically low base.

“The increase in business confidence to its highest level in nearly two years has largely been driven by interest rates remaining on hold,” said Jane Laverty, Northern Rivers Regional Director for Business NSW.

“With every interest rate rise, small to medium businesses experience an almost immediate reduction in customers walking through the door. This increase in business confidence is a positive sign.”

When it comes to their customers, 95% of businesses are experiencing some impact of the rising cost of living.

“The most common experience is reduced customer demand for their products and services,” Mrs Laverty said.

“A majority of businesses have observed consumer behavioural changes in the form of reduced frequency of purchases, reduced quantity per order, increased appetite for lower cost substitutes and increased price negotiation.”

“This means businesses are doing another pivot in their business lifecycle to meet this change.”

Businesses have recorded their highest levels of confidence in nearly two years, but remain concerned about cash strapped customers, insurance and energy costs.

Insurance is again the top of the list of cost concerns for businesses, while taxes/levies are second and energy costs third.

“It remains vitally important that our state and federal governments make the cost of doing business the number one, two and three issues on their agenda.

“To improve the ease of doing business, survey respondents consider taxes, levies and government charges as the area that requires top priority attention from government.”

Key findings from the survey of more than 1100 businesses include:

• • The Business Confidence Index has risen for the third straight quarter to -52.9, the highest reading in nearly two years.
• • 95% of businesses are experiencing some impact of the rising cost of living.
• • More than half (51%) of NSW businesses have reported business supply chain disruptions in the past three months.
• • 10% of businesses observed more job applicants as a result of cost-of-living pressures.
• • 92% of businesses have identified issues related to attracting and retaining skilled workers in their region.
• • 17% of businesses are planning to hire additional staff in the next three months, while 18% are planning to cut staff. The rest are planning to maintain the same headcount

“Northern Rivers businesses are looking ahead to the next quarter with considerably higher levels of confidence and that is pleasing for our regional economy and the community at large. That confidence will also be buoyed by locals continuing to spend in the region first.” Mrs Laverty said.

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