Shipping and supply concerns leave COVID behind

With Christmas just around the corner, WA business owners are feeling confident about the future, but higher costs and supply chain issues are expected to loom large in 2022.

CCIWA’s final Business Confidence Survey of 2021 shows sentiment remains brighter than pre-pandemic and the long-term average, and delays in the shipping of gifts won’t dampen WA’s festive spirit.

Concern about supply chain disruption will not go away, however. Seven in ten WA retailers (71 per cent) and nearly one in two businesses overall (46 per cent) are experiencing delays in the delivery of products for customers, diminishing Western Australian’s choices for gifts to go under the tree.

The ongoing disruption of flights, sea shipping and road trains is imposing higher costs on more than three in five WA businesses (63 per cent), and one in every three companies is suffering from production setbacks (34 per cent) or material shortages (35 per cent), or are concerned about the mental health strain on staff (32 per cent).

Worry about an uncontrolled outbreak of COVID-19 in WA is now an issue for less than half (46 per cent) of WA businesses — down six percentage points since last quarter — while international trade tensions were cited by 14 per cent of respondents.

Sourcing workers is a persistent issue, with nearly four out of five (79 per cent) businesses indicating they’re struggling to hire for a particular skillset. That’s up eight percentage points on last quarter, matching the peak of 79 per cent in the July quarter of 2021.

Businesses are reacting in various ways:

  • The majority (56 per cent) are upskilling existing employees, with businesses in the resources (64 per cent), construction (59 per cent) and agriculture (53 per cent) sectors most likely to be ramping up their training efforts.
  • More than half (55 per cent) are boosting existing employees’ base wages – up nine percentage points from last quarter. At the same time, nearly one quarter (23 per cent) are providing one-off financial rewards to existing employees – up five percentage points from the previous quarter.
  • More than half (54 per cent) of businesses are investing in training new employees, nearly one in six (16 per cent) are looking to attract and hire workers from other states, and about 12 per cent are providing sign on-bonuses or other incentives to new employees.
  • Nearly one third (31 per cent) are turning down offers for new work (such as tenders), including half (50 per cent) in the resources sector, nearly half (45 per cent) in construction, and two in five (40 per cent) in retail trade.

For the latest economic reports see CCIWA’s Economic Insights page.

CCIWA Chief Economist Aaron Morey said that in relation to the broader economy, business confidence has edged slightly higher.

“Three in five businesses expect the economy to improve in the next three months, while across next year 40 per cent have a positive outlook,” Morey said.

“Meanwhile skills shortages show no sign of abating, impacting four in every five WA business, up eight points since September.

“There will be some relief from skills shortages and supply chains issues with WA’s restricted borders set to ease on February 5. With record low interest rates, continued success controlling COVID and high rates of vaccination, WA businesses have good reason for optimism as they farewell 2021.”

For general employee advice and guidance, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email [email protected].

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