Monday, 11 November 2019
Business confidence in South Australia has sunk to its lowest level on record – at 71.6 points — with the significant fall marking the third consecutive decline in the South Australian Business Chamber – William Buck Survey of Business Expectations.
Business conditions have also slumped well into negative territory, falling nine points since June, and close to 25 points since this time last year.
The South Australian Business Chamber Chief Executive Martin Haese said a strong economy moving in a positive direction was essential to ensure the state could generate jobs and businesses could have the confidence to expand or export, but it was difficult when confidence was low and overheads were continuing to rise.
“We don’t want to talk the economy down, and we certainly don’t want this to become a self-fulfilling prophecy. But the numbers cannot be misinterpreted,” mr haese said.
“confidence is at record lows, and that’s significant given our survey is the state’s longest running, going back decades. Other bank and consumer surveys are also reflecting low business sentiment. The figures are deflating because we were optimistic the economy was improving, and we know there are many businesses succeeding locally and overseas.”
Mr haese blamed the slide in confidence – close to 45 points on a scale of 200 since december – on a confluence of issues including high unemployment, interest rate cuts, land tax uncertainty, geopolitical tensions and ongoing high utility costs.
“businesses have told us conditions have tightened even further. Total sales, orders received and average selling price are all down causing a decrease in profitability for more than half of respondents with only 15 per cent reporting an increase,” he said.
“there’s pessimism on the horizon and businesses aren’t expecting conditions to improve, despite leading into the busiest time of the year for many.”
William buck managing director jamie mckeough said confidence had fallen to what could be considered a dramatic low, but it had come from a similarly dramatic high a year ago.
“the survey results reflect the volatile times in which we live, however, if you sit back and reflect — business conditions could be worse,” mr mckeough said. “business conditions are less volatile than confidence, and that’s a good thing. There’s also less negative movement on the scale of conditions.”
Uncertainty influences confidence, and it’s logical to see a slide with current local, national and global economic factors. Businesses need to ignore the external noise and focus on what they can control.”
