The South Australian Business Chamber Executive Director Industry and Government Engagement, Anthony Penney, said South Australia was experiencing a new economic springtime buoyed by a change in government, an uneventful summer on the electricity front and improvements to our trade bottom line.
However, Mr Penney said the state’s economic roots needed more time to take a firm hold, as there were underlying concerns about profitability and labour costs.
For close to a third of businesses which took part in the survey, profitability was down, and only 26 per cent recorded an improvement. While labour costs remained stable for 68 per cent, they increased for 28 per cent of businesses.
“That’s where our roots not only need to take hold, but our economic stabilisers such as expenses and labour costs need to firm up and stay put,” Mr Penney said.
Mr Penney said many businesses were putting economic concerns and rising costs to the side, and being overtly positive as they considered the bigger picture of a state undergoing political change.
General business conditions were lower than expected for the quarter, however they were up compared to last March, and in March 2016.
“Even though conditions were better than they have been for a long time, our businesses thought conditions should be even more positive than they were,” he said.
Sales and revenue were up for close to 40 per cent of businesses, offset by the cost of materials — up for 46 per cent of respondents — and overheads were up for almost two thirds of businesses. Export sales were stable for 78 per cent of businesses, showing South Australian businesses standing strong in international markets.
Forecast confidence in South Australia’s economy over the next 12 months was also up — with 50 per cent of respondents expecting it to perform stronger, compared to 32 per cent last quarter and just 18 per cent in September last year.
While almost 80 per cent expected profitability to stay the same or improve, 97 per cent expected the cost of overheads to remain the same or increase.
For interviews and comment please contact Verity Edwards, Director of Media and Communications on (08) 8300 0221 / 0412 678 942 or email veritye@business-sa.com
