Business confidence is surging across regional Western Australia heading into the summer season, with regional businesses showing more optimism than those in the Perth metro area.
The Regional Pulse report for the December quarter found more than half of the businesses surveyed (52%) expected economic conditions to improve in the coming three months – an increase of 11 percentage points from the September quarter.
Businesses in the South West were most optimistic about the coming quarter with 84% expecting stronger conditions, reflecting the region’s popularity as a holiday destination over summer.
Business confidence was also high in the Pilbara with 72% expecting stronger conditions, driven by the continued strength of commodity prices.
CCIWA’s Head of Policy, Dr Anthea Wesley, said despite the positive outlook, high costs were still biting in regional WA.
“Rising operating costs continue to be the biggest barrier to growth for businesses in regional WA, with just under two thirds (40%) reporting it as their number one issue,” she said.
“However, the good news is that cost pressures do appear to be easing, down 14 percentage points since September, and currently at its lowest level in three years.”
Concerns about costs were most prevalent in the Great Southern region, where 75% of businesses said it was a barrier to growth, followed by Peel and the Kimberley region, where 61% of businesses said it was a barrier.
Labour shortages emerged as the second largest barrier to growth for regional businesses, with 39% reporting it as a barrier to growth – down 15 percentage points from the September quarter.
However, the number of businesses in regional WA who have struggled to hire for a particular skillset has risen to 85% – an increase of 18 percentage points.
“We’re still seeing demand for Tradespeople and Mechanic/Technicians outpacing supply right across regional WA,” Dr Wesley said.
“WA’s unemployment rate fell to 4.1% in November – the second lowest in the nation – so it’s not surprising that businesses are still struggling with key hires.”
