Regional businesses in Western Australia continue to be squeezed by high costs and skills shortages, as business confidence in the regions slips in both the short and longer term.
CCIWA’s Regional Pulse survey for the June quarter found just over a third (36%) of regional businesses expect economic conditions to improve in the coming quarter, down four percentage points from March.
A quarter (25%) of regional businesses expect weaker economic conditions in the next three months, an eight-percentage point rise since March.
Businesses in the Pilbara (50%), Wheatbelt (44%) and Goldfields-Esperance (36%) regions were most optimistic about the short-term outlook.
CCIWA’s Acting Co-CEO, Aaron Morey, said increased costs and labour shortages continued to put pressure on regional businesses.
“WA’s labour market remains incredibly tight and we’re seeing that play out more acutely in regional WA than in the city,” Mr Morey said.
“The Pilbara (79%), Mid-West/Gascoyne (79%) and Great Southern (68%) regions reported the most difficulty filling positions, and across all regions 66% of businesses highlighted skills shortages as a barrier to growth.
“Across regional WA, 66% of businesses said they struggled to fill positions, up four percentage points since March.”
Concerns about rising operating costs remain high across regional WA, with 67% of businesses reporting it as a barrier to growth.
Cost pressures are most acute in the Great Southern (77%), Mid-West/Gascoyne (75%) and Peel (74%) regions.
“Overall concern about rising costs in the regions has eased slightly, down one percentage point since March and now at its lowest level in just over three years,” Mr Morey said.
“While costs are still clearly a major concern in the regions, it’s pleasing to see the pressure has eased somewhat, due to easing inflation and interest rate reductions.”
A lack of housing for workers emerged as the third biggest concern for businesses in regional WA, with 43% reporting it as a barrier to growth – up seven percentage points since March.
“This shows a clear divide between businesses in the regions and those in the city, where 15% of businesses highlighted it as a concern,” Mr Morey said.
“Housing supply is a challenge right across the state but in our regional towns and cities, the tyranny of distance means housing is often a deciding factor for whether or not someone can take a job.”
Vice President of the Dunsborough-Yallingup Chamber of Commerce and Industry and CEO of Busselton Hospice Care, James Jarvis, said low unemployment rates were a challenge for the Aged Care sector.
“In my social enterprise sector, aged care, I find the low unemployment rate as one of the barriers,” he said
“I think in a way it affects rates of volunteering too, but that is offset by higher numbers of retirees, evidenced by the fact that the demographic of volunteers is much higher.”
