Business indicators provide local concern

30 May 2011

Business Indicator figures for the March quarter released today by the Australian Bureau of Statistics (ABS) reveal concerning news for local business, according to the State’s leading business membership organisation, Business SA.

The data shows gross profits in Australia decreased 2.0 per cent (seasonally adjusted), while wages and salaries increased by 1.4 per cent.

Industry sectors with the largest increases in sales of goods and services included electricity, gas, water and waste services, while mining and other services were amongst those with the largest decreases.

South Australia experienced a 2.9 per cent decrease in sales of goods and services and a wage decrease of 0.6 per cent in the March quarter.

Business SA Chief Executive Officer, Peter Vaughan, said that the indicators reflected the pressure being felt by local business.

“These business indicator figures reveal our ongoing two speed economy, with some areas of the economy doing well while others are struggling,” said Mr Vaughan.

“Unfortunately the economic environment in South Australia appears particularly weak, with our State having the largest decline in sales of goods and services and the only fall in wages and salaries.

“This data reflects the low levels of business and consumer confidence and it is concerning given the many other rising costs being faced by businesses.

“Weakening profits indicates that businesses are under pressure through lower margins and weak consumer demand.

“The Reserve Bank must take into consideration the extent of the multi-speed economy and leave interest rates on hold, allowing for a more widespread improvement in the economy.”