General business conditions have shifted back into positive territory and are catching up to confidence in the September quarter Business SA – William Buck Survey of Business Expectations, rising a considerable 11.1 points since the June quarter to 103.6.

While confidence dipped slightly to 114.2 points, businesses are still very positive about the state’s economy, up 29.1 points since September last year, and up 16.7 points over the decade.

The quarterly Business SA – William Buck Survey of Business Expectations is the longest-running survey of its kind in South Australia, and is showing business conditions are better than most operators anticipated in the June quarter.

Business SA Executive Director Industry and Government Engagement, Anthony Penney, said businesses had expected to pay much more for wages, they expected fewer orders, they anticipated their selling price to be lower, and they certainly didn’t think their total sales or revenue to be so high.

“The great news emerging points to much higher sales and revenue growth, increased profitability, and lower expenditure than anticipated. In other words, when their income increases and their costs decrease, their business conditions improve,” Mr Penney said.

Contributing factors included the business community’s response to a cautious State Budget – held several weeks before the survey opened – and lower Emergency Service Levy notices arriving.

“People expected worse conditions this quarter, but it looks like they’ve been pleasantly surprised,” Mr Penney said. “With improved operating conditions comes improved general business conditions and continued optimism.”

Total sales and revenue increased nine points from the June quarter, and more than 39 per cent of businesses expected the economy to be slightly stronger or stronger over the next 12 months, compared to 22.9 per cent expecting it to be weaker or slightly weaker.

Export sales were higher than anticipated, up for 12.2 per cent of businesses compared to a 5.4 per cent of operators in June. Overheads were higher for 53 per cent, compared to 59 per cent in June. More businesses expected labour costs to be higher than they were.

William Buck Managing Director Jamie McKeough said South Australia’s business confidence now rated higher than national business confidence for the first time since June 2013.

“Businesses are more optimistic about the coming quarter than how they trended in the September quarter, which is a very positive sign for our state’s economy,” Mr McKeough said.

Mr McKeough said it was also positive to see that more than 57 per cent of businesses were seeking to grow, rather than simply maintain market status or simply survive.

“We know that 22 per cent are planning to hand their business to the next generation within five years, and 19 per cent want to sell. Given that’s very few, those that want to grow by merging or acquiring new businesses will have to be proactive to find those potential future gems,” he said.

To view the survey summary, please click here