Confidence among WA businesses held steady over the past quarter, with pressure from skills shortages and rising costs easing.
CCIWA’s quarterly Business Confidence report, which surveyed more than 660 WA businesses, found one third (35%) thought conditions would improve in the final three months of 2024, while a quarter (24%) thought conditions would weaken.
The remaining two in five (41%) believed conditions would stay the same.
Read the report
Cost pressures easing
CCIWA Chief Economist Aaron Morey says concerns about rising costs continue to drag down confidence.
“The survey found 71% of WA businesses identified rising costs as a barrier to their growth, with agriculture, real estate and hospitality reporting the highest concerns,” he says.
“The good news is those concerns appear to be easing, now at their lowest point since March 2022.”
The survey asked businesses what they had done to mitigate the impact of rising costs, with more than a third (36%) saying they had adjusted their own prices to cope with cost increases.
“This suggests that cost pressures may not necessarily be diminishing, but rather businesses are making their own adjustments in order to continue operating,” Morey says.
“This really highlights why easing the cost of doing business should be a top priority for government, because those costs are eventually passed on to consumers through higher prices.
“Reducing WA’s payroll tax burden, which is the highest in the nation, would be a significant step towards reducing that pressure on small and family businesses.”
Other measures used by WA businesses to combat the impact of rising costs include improved management of inventories (30%), new measures to boost efficiency (28%) and cutting products or operating costs (27%).
Labour shortages at three-year low
The survey also revealed some promising signs for businesses struggling to find staff, with concern about skills shortages at its lowest level in three years.
“This downward trend is welcome news – 61% of WA businesses identified it as a barrier to growth which is down 23 percentage points from its peak this time two years ago,” Morey says.
“However, that figure is coming off a very high base and significant concerns still remain in businesses in the construction (77%) resources (73%) and manufacturing (73%) sectors.”
Businesses were also asked about their attitudes to different energy sources, finding that the biggest influence on business attitudes towards energy sources was reliability.
“More than half (51%) of the businesses surveyed said reliability was their leading priority, followed by cost, identified by 42%,” Morey says.
Small and medium-sized businesses were most likely to prioritise reliability, while larger businesses were more likely to prioritise cost.
CCIWA’s Economic reports are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page.
