Businesses in Western Australia are ending 2025 on an optimistic note, but cost pressures continue to weigh heavily.
CCIWA’s quarterly Business Confidence Survey for the December quarter found almost half (49%) of WA businesses expect stronger conditions in the short term, up eight percentage points from last quarter.
Just under one in four (23%) expect no change, while close to the same amount (28%) expect weaker conditions.
Over the longer term, the majority (67%) of WA businesses expected economic conditions to improve over the next 12 months, and just over one in five (21%) anticipated no change. The remaining one in eight (13%) expected conditions to soften, down 12 percentage points since last quarter.
CCIWA’s Head of Policy, Dr Anthea Wesley, said a number of factors were helping to buoy business sentiment in WA.
“Strong commodity prices and significant government-backed infrastructure projects are helping to keep WA’s business confidence relatively strong,” she said.
The survey of more than 520 businesses also found that despite the rosy outlook, cost pressures and skills shortages were continuing to have an impact.
Both factors have seen a decline from the previous quarter’s results but remain key concerns.
Slightly over half of businesses (52%) reported rising costs as a barrier to growth over the coming year, and just under half of WA businesses (49%) reported skills shortages.
“It’s clear that although inflation seems to be cooling, costs are still very high for WA businesses and remain a significant concern,” Dr Wesley said.
“Wage costs in particular are extremely high, which is having an impact on how much payroll tax WA businesses are paying.
“It is critical that the WA government addresses the state’s unfair payroll tax system to keep WA competitive and ease the cost pressures on small and family businesses.”
The December edition of Business Confidence also asked businesses about the impact of insurance costs – long identified as a significant barrier to growth.
Just over half (53%) of businesses reported that insurance was one of their top three cost pressures.
Almost two in five (39%) said their business had to go without insurance or operate under-insured due to cost.
Dr Wesley said consecutive rises in insurance premiums have been extremely frustrating for WA businesses.
“Insurance costs have been steadily climbing for both households and businesses, which is forcing many small and family businesses in particular to make some very difficult choices,” she said.
“Other businesses have told us they have struggled to even get insurance coverage.
“All respondents in the public administration and safety sector said they had been declined coverage on at least one occasion, while businesses in the events, arts and recreation services industries have also been declined.”
