Media release

Confidence to pull us through challenging conditions

Tuesday, 2 November 2021

South Australian business confidence has held tight this quarter despite ongoing challenging conditions including the lack of skilled labour and access to materials. The South Australian Business Chamber William Buck Survey of Business Expectations for the September quarter has confirmed a 106.1 confidence index, increasing 1.6 points returning to the two-year high we experienced in March 2021.

However, general business conditions saw another index fall to 92.7 points. Impacting the September quarter results was the state-wide lockdown in July 2021 and subsequent post-lockdown restrictions. While these were a small factor in the decline of business conditions for a second quarter, it was the longer-term issues that were plaguing businesses including border closures, supply chain disruptions and skills shortages.

The South Australian Business Chamber Chief Executive Martin Haese says that business confidence and conditions in South Australia throughout the pandemic have always shared a similar trend.

The divergence of confidence and conditions this quarter only highlights how tough it has been to conduct business over the last six months.

No matter how small the increase in confidence, it is a testament to the resilience and strength of the South Australian business community.

The South Australian Business Chamber Director of Policy and Advocacy Andrew McKenna says that the Premier’s recent announced that the borders will reopen on 23 November is a huge boost for the 65% of businesses who remained impacted by domestic border closures and 70% with a lack of suitably skilled workers.

Nearly half of businesses reported that their profitability was down in the September quarter. The borders reopening is a huge win for these businesses as it mitigates the issues around labour shortages and material costs.

Continuing challenges in global supply chains and increased demand domestically saw the number of businesses experiencing increased costs of materials climb to over 70%, up over 6% from the June quarter and up 37% from 12 months ago. 

This increase in the costs of materials resulted in nearly half of businesses experiencing a decrease in their profitability.

Unfortunately, businesses operating in the hospitality, entertainment and tourism sectors continue to have a dismal sales outlook for the December quarter. For businesses that have experienced restrictions from the start, such as limits on dancing and consumption of food and drink, we expect little change to their outlook especially as the COVID-19 recovery roadmap doesn’t indicate a lift of these restrictions until the end of the year.

Chair of William Buck AUS/NZ and survey partner Jamie McKeough says that he noticed significantly more comments in the survey from across the range of questions.

With more business owners taking the time to provide us with detailed comments, this tells me that they have a lot to say, and they’re not all in agreement either. 

When considering these comments against the changes announced in the COVID-19 recovery roadmap that the State Government released last week, businesses want more certainty in the future. 

While borders opening will be welcomed by the 66% who said the border closure was impacting their business, there is still uncertainty for business. It doesn’t make sense to leave the decisions around staff and customer vaccinations to each business to navigate.

54% of businesses support mandatory vaccinations for their industry, while 33% do not. As for employers making vaccinations compulsory, there was a 4‑way split between yes’, no’, unsure’, and waiting for the government to mandate’. Clarity, or at least guidelines from the government, would now be beneficial. 

These are emotive decisions which only cause more significant pressure on business owners”.

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