Business confidence has surged in 2018 to mid-boom levels as optimism rises about Western Australia’s economic outlook.
The latest WA Super–CCI Survey of Business Confidence 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 Economist Rick Newnham said 75 per cent of WA businesses are expecting the economy to improve or stay the same in the short term – the highest it has been in seven years.
“Most WA businesses (63%) expect the WA economy to improve or stay the same in the next 12-months,” Mr Newnham said.
“This puts business confidence for the short and long-term back at mid-boom levels – the highest in over seven years.
“This is a stark difference to just under three years ago when business confidence bottomed out to the same lows experienced during the GFC – confirming that the WA economy has reached a turning point.
“This highlights that businesses are feeling more confident about the future of the WA economy, which continues to be led by the mining sector, with 83 per cent anticipating stronger economic conditions for the year ahead. This isn’t surprising, given $103 billion worth of resource projects are estimated to be in the pipeline.
“Businesses in retail do however continue to be less optimistic, with over 40 per cent of retailers anticipating economic conditions to worsen over the coming year, reflecting the low growth in retail sales across WA.
“CCI has, and will continue to, urge the State Government to remove its shackles from retailers by changing the law to allow retailers to open their doors when they want to. This will bring WA in line with the rest of the country, support local businesses and job creation.”
The WA Super – CCI Employment Index is also showing positive news for the WA jobs market.
“A third of businesses (34%) increased their employment levels this quarter, while almost half (49%) kept staff levels steady. These conditions are expected to continue to improve next quarter, which is an encouraging sign that slack in the labour market is tightening,” Mr Newnham said.
“Production continues to fluctuate in WA, with one in five businesses (20%) reducing production in the March quarter but over half (53%) expecting to increase levels in the June quarter.
“Two out of five businesses (40%) did however identify rising operating costs as the biggest barrier in growing their business over the coming year, followed closely by weak demand (36%), and foreign and online competitors (36%).
“For business confidence to turn into job creation, WA businesses need to feel confident that the Government wants to foster an investment climate and the State Budget has gone a long way to achieving this.
“CCI urges the Government to continue to their spending discipline and keep taxes stable, so this boost in confidence can continue.”