Expectations that businesses will close out the December quarter stronger than the rest of the year has given Western Australia’s business confidence a much-needed boost.
The latest WA Super–CCI Business Confidence Survey conducted by WA’s peak business body, the Chamber of Commerce and Industry WA (CCI), is the only WA-specific index in the country, providing a snapshot of state-wide economic conditions and business expectations.
CCI Chief Executive Officer Chris Rodwell said business’ short-term confidence in the WA economy has gained some ground in the September quarter, increasing by 7 per cent since the June quarter.
“This bounce in confidence has likely been driven by expectations that employment and production will improve. More than two out of five businesses (43%) expect to increase production levels over the next quarter, up 8 per cent, and more than one out of three (34%) expect to increase their number of workers – up 6 per cent, which is good news for job seekers.
“However, the improved short-term outlook hasn’t translated to a longer-term confidence boost, with business confidence for the next 12-months declining by 3 per cent since last quarter and 16 per cent compared to this time last year.
“Global headwinds in the UK and Eurozone and ongoing trade tensions between the US and China has likely dimmed businesses expectations for the future of the WA economy. This follows CCI’s latest Consumer Confidence Survey revealing that West Australians’ confidence in the economy has dropped to its lowest level since December 2017 driven predominantly by heightened global uncertainty.”
“WA businesses continue to face barriers to growth, with two out of five businesses (40%) identifying weak demand as their largest hurdle to growing their business, including 54 per cent of retailers and 42 per cent of manufacturing firms. This is followed by rising operating costs (24%) and availability of skilled workers (24%). Access to skilled workers is particularly constrained in the mining and health care sectors.”
“Despite the concerns about long-term growth, WA retailers are expecting an uptick leading into Christmas sales, with 21 per cent expecting conditions to improve over next three months – up 13 per cent,” Mr Rodwell said.
“Christmas trading is an important opportunity for local WA retailers to end the year with a bang and for workers to gain extra cash from the extended trading hours. However, last week the State Government decided retailers will have 14 hours less to trade than what was awarded in 2017.
This decision is yet another missed retail trading opportunity that will push more people to shop online rather than on goods being sold by WA bricks and mortar retailers.”
“It’s also a missed opportunity on jobs. Christmas is a time when casual job opportunities are created, often taken up by young people. With a youth unemployment rate in this State of 14.3%, CCI expects the State Government to make decisions based on creating jobs for young people not restricting them.”
“The priority in WA must be supporting our local retailers to compete, create new jobs and add additional hours of work by letting West Australians decide when they want to shop and businesses to decide when they open their doors.”
WA Super Chief Executive Officer Fabian Ross said:
“It is not surprising there is less medium-term confidence. The reality is businesses remain cautious given the global market environment. At the same time, when business confidence lowers, so does consumer confidence. It can be an unpleasant cycle for all concerned. We should always consider ways to continue to support small WA businesses to help turn this around.”
To read our WA Super–CCI Business Confidence Survey click here.
