27 February 2018
Confidence is heading in the right direction, but underlined by ongoing hesitation.
The Business SA – Statewide Super Survey of Business of Expectations shows confidence continues to head in the right direction, despite ongoing hesitation and concern about the cost of overheads and materials, unemployment and inflation.
Business SA Executive Director Industry and Government Engagement, Anthony Penney, said the 2017 December quarter survey showed hesitation underlined South Australia’s trading conditions, but businesses were performing better than anticipated.
Confidence in the South Australian economy is rising, hitting 98.4 points - up 13.3 points since the September quarter and 12.6 points compared to the December quarter two years ago.
Since the Global Financial Crisis, Mr Penney said confidence had only passed 100 twice – in September 2012 and in mid-2016, but it still hasn’t returned to the mid-point of 100.
“The latest survey exceeds expectations. Our survey participants in September expected general business conditions to rise to 99.6 points, yet they grew to 110.2,” Mr Penney said.
“Total sales revenue was also above expectations, which means our businesses are slowly turning over more products and services, and generating more revenue at the same time.”
The survey showed more than 60 per cent of respondents were expecting labour costs to rise, 41 per cent thought the unemployment rate would rise, and a staggering 97 per cent thought inflation would stay the same or increase.
More than half saw their overheads go up in the December quarter, and 45 per cent saw the cost of materials increase.
South Australians were generally more pessimistic about the state’s economy than the national economy – which may be a reflection of how people feel about political uncertainty as the election approaches.
“Our businesses are telling us it’s time to proceed with caution. Which is a fair call until we know what to expect after March 17,” Mr Penney said.
National confidence has hit near-record heights of 129.6, up 15.9 per cent on last quarter and 28.2 per cent on two years ago.
To speak to Anthony Penney, please contact Verity Edwards on 0412 678 942.