Internation trade uncertainty is weighing heavily on Western Australian businesses, driving a confidence downturn, CCIWA’s June Business Confidence Survey finds.
Concerns about global trade tensions have doubled, with one in five (19%) of the 473 businesses surveyed identifying it as a threat to their operations – up from 9% six months ago.
Read the June Business Confidence Report
CCIWA Acting co-CEO Aaron Morey said uncertainty around the US tariffs and the escalating Middle East conflict were dampening confidence across many sectors.
“WA is a trading economy and the knock-on effect of the US tariffs and retaliatory tariffs have the potential to weigh on our economy,” he said.
“Coupled with the Israel-Iran war, the impact on supply chains is a major concern for many businesses, with three in five (60%) WA businesses saying they expect their supply chains to be impacted by the tariffs.
“This shows that even those businesses that are not trade exposed are bracing for impacts to their operations as a result of the tensions.”
High costs remain biggest barrier to growth
The survey found high operating costs remain the biggest barrier to growth for businesses, as reported by seven in 10 (70%) of respondents.
Rising wages were the highest cost for four in five (80%) businesses followed by increased insurance premiums (54%) and supplier costs (41%).
Small businesses are more likely to be squeezed by government taxes, levies and charges, with 41% reporting this is their top cost pressure compared with just 12% of large businesses.
“For small and family businesses, these costs can’t be easily absorbed and often can’t be passed on to the consumer, so many are having to make tough decisions about staffing levels and services,” Morey said.
“Payroll tax relief is one lever the government can pull to offer instant relief to small and medium sized businesses who are doing it tough.”
Skills shortage struggle continues
WA businesses are still battling labour shortages, with 64% struggling to find workers with the right skills.
The sectors hit hardest are resources (82%), professional services (75%) and transport (70%).
“Skills shortages are still a problem across the WA economy but despite the uptick in concern this quarter [by four-percentage points], it’s still significantly lower than the highs of two years ago,” Morey said.
CCIWA’s Economic reports, including Business Confidence, are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page.
