CCIWA Chief Economist
Confidence among WA’s regional businesses has dampened, with a 26-point drop in short-term optimism. In the first CCIWA Regional Pulse report for 2022, two in five (43%) regional businesses expect the economy to improve in the next three months, down from 69% last quarter.
Many businesses revised down their outlook from ‘upbeat’ to ‘neutral’, with expectations of unchanged conditions more than doubling to 36%. Pessimism increased by 7 points, with one in five (21%) regional businesses expecting a weaker economy over the next three months.
Looking to the long term, confidence that the economy would improve was reported by 39% of respondents, remaining brighter than the outlook of metro businesses (27%).
The impact of worker shortages (cited by 84% of respondents), rising costs (75%) and supply chain disruptions (67%) has grown more severe for nearly every region. As forecast by CCIWA, these challenges have been heightened by the presence of COVID-19 in WA, but are expected to ease in the medium term, along with COVID-19 restrictions and the State border. They do underline, however, that international skilled migration will be critical in resolving skills shortages. Nine in ten businesses in the Pilbara (93%), Mid-West/Gascoyne (92%) and Great Southern (91%) cited skills shortages as a barrier to their growth. When it comes to rising costs, the Wheatbelt (86%) and Great Southern (82%) were the worst-hit.
Three in five regional businesses (62%) are responding to the labour crisis by training additional staff, including trainees and apprentices. A similar proportion (60%) are boosting wages, particularly those in the Pilbara (83%) and Great Southern (70%). Across the regions and in the metro area, trades roles remain in high demand.
Remarkably, only 1% of respondents expected labour costs to ease in 2022, while nearly three quarters (72%) expect wage pressure to continue to rise.
The full report: Regional Pulse – April 2022