Business responds to CPI rise

25 January 2011

The Consumer Price Index (CPI) increased in the December quarter, according to the State’s leading business membership organisation, Business SA.

Australian Bureau of Statistics (ABS) figures showed that the national CPI increased 0.4 per cent from the September 2010 quarter to the December 2010 quarter, for an annual rate of 2.7 per cent.

Adelaide’s CPI figures increased 0.3 per cent in the same quarter, for an annual rate of 2.5 per cent.

Business SA Chief Executive Officer, Peter Vaughan, said that while inflation increased, the local business community remained under pressure.

“While there was a small rise in inflation in the December quarter, interest rates must remain on hold when the Reserve Bank meets next week,” Mr Vaughan said.

“The increase in Adelaide’s monthly and annual rate of inflation was below the national average.

“Economic data over the past month has confirmed that business and consumer confidence remains low and the domestic economy remains quite fragile.

“It is important to note that the Reserve Bank’s preferred measures of inflation remain comfortably within its target range of 2 to 3 per cent.

“The November interest rate rise and its effect before Christmas hurt the many small businesses across South Australia who are facing rising business costs, difficulties in accessing finance and struggling to build any momentum.

“Decreasing pharmaceuticals and computing equipment costs were not enough to offset the rise in fruit and vegetable costs and the price increase in domestic holiday travel and accommodation.”