The South Australian Business Chamber Executive Director Industry and Government Engagement, Anthony Penney, said businesses were working exceptionally hard to turn a profit, with sales and revenue, exports and orders received increasing, but they were still battling high overheads.
“The cost of overheads was up for more than half of our respondents and the same for 45 per cent, with only 3.9 per cent noting they had fallen, and 96 per cent found the cost of materials to be the same or higher than the September quarter,” Mr Penney said.
“Business confidence is improving because revenue and orders are coming in, but they’re still facing rising costs, including power, water and rates, and struggling to turn a profit.”
The survey shows the confidence index has risen to 116.4 points, up two points from the September quarter and up 18 points compared to the December 2017 quarter, and up 33.1 points compared to the December 2018 quarter.
Still in positive territory, the general business conditions index fell slightly to 102.6 points.
The total sales and revenue index rose 6 points to 109.6, showing South Australian businesses are starting to see positives on the horizon. Despite Australian Bureau of Statistics figures for December showing a fall in retail trade, the vast majority of survey respondents were in industries outside of retail.
Mr Penney said rising confidence in South Australia was not reflected in the national economy, with the national confidence index falling almost 4 points.
William Buck Managing Director Jamie McKeough said now was not the time to be complacent about the state’s economic confidence and growth opportunities, because 25 per cent of local businesses dealt with interstate counterparts or clients.
“Remaining cognisant of the national economy and shifting trends should ensure their operations remain strong,” Mr McKeough said.
“However, small to medium-sized business owners and operators are still feeling cost challenges on a daily basis – including high power and water prices — and there are steps they can take to mitigate those rising costs. Taking time to consider the need to innovate or refresh their offerings, improving productivity or considering economies of scale to remain locally or globally competitive are essential.”
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To arrange an interview please contact the South Australian Business Chamber Director of Media and Communications, Verity Edwards on 0412 678 942.
19 February 2019
Photo: Nick Scheerbart
