Low national business confidence and falling expectations are sending out a
strong warning to Tasmania according to peak business organisation, the
Tasmanian Chamber of Commerce and Industry (TCCI).
TCCI Chief Executive Michael Bailey said the latest edition of the Australian
Chamber of Commerce and Industry’s (ACCI) National Business Expectations
Survey showed business conditions remained mostly unchanged and in negative
territory over the June quarter of 2013.
Mr Bailey said it was concerning that recent improvements in business confidence
nationally were waning, with most expectations indicators for the September
quarter recording a decline.
“This should send a strong message to Tasmania, as well as to the rest of
Australia, that strong and sustainable action is needed to boost business
confidence,” he said.
In the survey, General Business Conditions and Profits improved marginally to 43.3
and 38.0 in the June quarter, but both indices remain well below the 50 mark that
separates expansion from contraction and are expected to deteriorate further in
the September quarter. Selling Prices continued to deteriorate in June, with the
index falling to its new 19 year low of 42.7. Business expects selling prices will
weaken further in September. Labour market conditions softened further in the
June quarter, with the Employment index declining to 44.9, its lowest level in four
years. Business expects employment to trek down further in the coming months.
Overtime Utilisation index remained relatively unchanged at 42.9 in the quarter,
with business expecting overtime hours worked to increase marginally in
September.
Survey results show that conditions are the worst for small business, with
Employment contracting for firms of all sizes. Wage Growth remains elevated for
all firms, though wage pressures are more acute for medium-sized business.
Investment in Plant and Equipment is solidly in negative territory for small and
large businesses.
“The June quarter survey shows actual business trading conditions remained
mired in contractionary territory over the quarter,” Mr Bailey said.
“More importantly, it is concerning that recent improvements in national business
confidence have started to show signs of receding, with most forward indicators for
the September quarter deteriorating.
“This is bad news for Tasmania.
“Despite small improvements in the quarter, business conditions and profitability
remain subdued and cost pressures remain a significant concern for businesses
throughout Australia as labour cost remains elevated.”
Mr Bailey said the situation made the outcome of this week’s Jobs Forum even
more important for Tasmania.
The Survey covered the three months to June 2013 and had 2,538 respondents.
A full copy of the Survey is available on the ACCI website at:
http://www.acci.asn.au
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