Following last week’s release of the latest CPI, the June results of South Australia’s longest-running business survey are out. Business confidence has been declining and despite an optimistic bump in March, the Business Confidence index for the June quarter contained in the South Australian Business Chamber William Buck Survey of Business Expectations was down 23.9 points to 74.9 points.
The South Australian Business Chamber Chief Executive Andrew Kay identified the current cost increases as the main reason keeping business owners awake at night, with labour availability and generating sales rounding out the top three spots.
“In terms of cost increases, it is worth highlighting a really varied response across the South Australian business community. For nearly 40 per cent of businesses, passing on a cost increase to their customers was not even a consideration, despite their pressures. For some, regulations and fixed contracts remove the option altogether. However, those that can, need to have the confidence to initiate the increases that can keep their businesses financially viable.
“These varied responses speak to the fact that ‘The South Australian business community’ is not a homogenous group all operating in tandem. There are businesses that have performed well and grown during the last couple of years, while many in customer-facing industries like hospitality and tourism have struggled under the conditions.
“The tight labour market has been well documented, and this was also reflected in the survey. 70 per cent of businesses found it harder to find workers in the June quarter, up 10.8 percentage points from March. While we applaud Initiatives like the new independent national agency Jobs and Skills Australia, there is an immediate need to address the labour and skills shortage that cannot be easily resolved.
“The June quarter results are not without good news, with South Australian business conditions and total sales/revenue indices remaining steady from previous quarters. Business conditions for the September quarter are expected to slightly decline by 4.2 points while the Total Sales/Revenue Index is expected to remain steady.
“The majority of business operators are also reporting that increasing interest rates are impacting their business. With the cash rate sitting at 1.35 per cent after three significant increases, the expectation is that the effect on consumer demand will start to take hold.
“What businesses don’t want to see is an over-correction. As they juggle increased costs and price increases, they still need to keep the demand equation alive. It’s a pertinent reminder that supporting local businesses has never been more important.”
Download the June 2022 quarter results >
About the South Australian Business Chamber William Buck Survey of Business Expectations
The South Australian Business Confidence Index and Business Conditions Index are our two key metrics of business sentiment. The Confidence Index is a forward-looking index and reflects the business sentiment and expectations of the economy over the next 12 months. The Conditions Index is a more reflective index which asks businesses on the quarter they just experienced.
