Rising operating costs curb WA regional business growth

CCIWA’s latest Regional Pulse report shows soaring operating costs the primary obstacle to business growth in regional Western Australia.

The report, which delivers a region-by-region breakdown of the quarterly Business Confidence survey, reveals 84% of businesses in regional WA consider rising costs a significant concern. This is up four percentage points from the June quarter. 

In contrast, 75% of businesses in the Perth and Peel regions view rising costs as a growth barrier. 

READ THE REPORT 

Graph showing barriers to business growth for WA regional businesses

Region breakdown 

A whopping 92% of Pilbara businesses identify rising operating costs as a major challenge. The South-West and Great Southern regions follow, with 86% expressing concerns about costs, trailed by the Mid-West/Gascoyne and Goldfields-Esperance at 83%, and the Wheatbelt at 82%. 

CCIWA Chief Economist Aaron Morey says the impact of rising costs is having serious implications on regional businesses. He points out inflation, interest rates and fuel expenses are contributing to narrow profit margins. 

Morey says skills shortages continue to plague regional WA businesses, particularly mechanics, technicians, engineers, farm staff and childcare workers. Although there are signs it is easing. 

Wages bills rise 

Labour costs have also climbed in the September quarter with four in five businesses in regional WA reporting higher wages bills since June. 

“This is because many businesses in regional WA are having to offer more money to attract the workers they need, in many cases from interstate,” Morey says. 

Despite the challenges, businesses in regional WA are more optimistic about the outlook in September compared with the previous quarter.   

To help relieve pressure on regional employers, CCIWA is calling on the State Government to reduce payroll tax for WA businesses, which face the heaviest payroll tax burden in the country. 

CCIWA’s Economic reports, including Regional Pulse and Business Confidence, are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page  

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