14 November 2017
Green shoots are appearing in the South Australian economy, as confidence rises in the Business SA - Statewide Super Survey of Business Expectations this quarter.
However, medium to long-term trends are showing business confidence levels still have a long way to go to reach peaks achieved before the Global Financial Crisis, and again in 2013 and 2016.
Business SA Executive Director of Industry and Government Engagement Anthony Penney says confidence has risen 4.1 index points since the June quarter to reach 85.1, but is still down 20. 5 points compared to September last year, and 28.9 per cent compared to September, 2007.
General business conditions were above expectations for the quarter, but were also down on last September and a decade ago.
“Business SA welcomes the increasing confidence among South Australian businesses, but we know more needs to be done to help them improve their operating conditions,” Mr Penney said.
While confidence increased, Mr Penney said it was still concerning that over the quarter almost 60 per cent of businesses saw their overheads increase, and training expenditure rose 26 per cent.
Profitability was also a concern, with 31 per cent of businesses recording it being down over the quarter, and only 22 per cent recording an increase.
More than 45 per cent of the businesses which took part expected the South Australian economy to perform weaker or slightly weaker over the next 12 months, and 53 per cent expected the unemployment rate to rise.
“Businesses are concerned about the real cost of labour and despite Holden closing and the auto supply chain shutting down, they still don’t think it will be easy to find professional or skilled workers,” Mr Penney said.
However, Mr Penney said it was positive to see more than a third of businesses expected total sales and revenue to increase over the next quarter.
The Business SA – Statewide Super Survey of Business Expectations September Quarter report also quizzed businesses on what they thought the main competitive advantage was in being based in South Australia, with themes emerging around lifestyle and cost of living.
Participants found competitive advantages to include the ease of moving around Adelaide and South Australia, the quality of lifestyle, cheaper housing and a lower of living, despite power and water prices being high.
Having to work harder than in the eastern states was also seen as a positive, because respondents found it created a more resilient business environment.