CCIWA Chief Economist
Delays in the shipping of gifts won’t dampen WA’s festive spirit, as the outlook of businesses held firm ahead of Christmas. CCIWA’s final Business Confidence Survey of 2021 shows sentiment remains brighter than pre-pandemic and the long-term average, while higher costs and supply chain issues are expected to loom large in 2022.
Ahead of Christmas, this quarter’s special feature focuses on supply chain disruptions. Seven in ten WA retailers (71%) and one in two businesses overall (47%) are experiencing delayed 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%). One in three are suffering production setbacks (34%), material shortages (35%) or are concerned about the mental health strain on staff (32%).
Turning to the economy, business confidence has edged slightly higher. Three in five businesses (61%) expect the economy to improve in the next three months, while across next year, two in five (40%) have a positive outlook.
Meanwhile skills shortages show no sign of abating, impacting four in every five WA business (79%), up eight points since September. The worker shortfall is hitting every part of the economy, with concerns particularly high for companies in the resources (93%), manufacturing (86%), construction (84%) and agriculture (83%) sectors. The health and community services sectors – in particular aged care and disability providers – also continue to struggle in the face of shortages.
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. As more familiar economic issues begin to return in 2022, we look forward to remaining at the forefront of reform, continuing to provide information, resources and advice to WA businesses and government in the coming year.
The full Business Confidence Report for December 2021 is attached.