BUSINESS confidence in the State’s economic outlook is on the improve and the sector’s view of the national economy has taken a dramatic upswing following the election of the Coalition Government.
And the confidence level for the Tasmanian outlook over the next 12 months is the highest for three years. These are some of the major findings from the latest Tasmanian Survey of Business Expectations released yesterday.
The quarterly survey conducted by the Tasmanian Chamber of Commerce and Industry (TCCI) anticipates improvement in most index measurements with the exception of employment.
TCCI Chief Executive Michael Bailey said there had been emerging signs that confidence was returning to the business community over recent surveys.
This was on the back of improved business conditions, and this trend has continued in this survey.
“Importantly, confidence in the 12-month outlook for the Tasmanian economy is at its highest levels for three years, which is a welcome development,” Mr Bailey said.
“But the strongest indicator is confidence in the national economy, up a full 10 points in a quarter, which most likely reflects a strong response to the outcome of September’s Federal election and the greater certainty provided by majority government at the national level.
“This adds credence to the TCCI’s call yesterday for the State election to be brought forward to February to give Tasmanians the opportunity to elect a majority government.
“With the survey showing 82 per cent of Tasmanian businesses want majority government, such an outcome would further boost business confidence in the State.”
Mr Bailey said remarkably, confidence in the national economy had bounced up from 50.9 index points, which is broadly consistent with long-term trend growth, to 60.9 points.
“This index has not reached similar levels since a short period in 2009-10 indicating that the Tasmanian business community clearly has high hopes for the incoming Abbott Government and its ability to implement a pro-business agenda to improve competitiveness and productivity.
“In general terms, the business conditions index, which is a broad indicator of short term performance has recovered to approaching normal levels.
“It was at its lowest ever levels in mid 2012 but both the September quarter outcome and December quarter expectations are close to 50 index points.”
However, Mr Bailey warned that the latest survey results did not point to any short-term improvement in labour market outcomes, with similar survey results for employment and overtime to those recorded throughout this year.
“One of the weakest areas of Tasmania’s economic performance in recent years has been in capital investment and the survey indicators for capital investment have stabilised in recent quarters, after rising off the lows reached in mid-2012.
“However, in the absence of stronger markets, the survey shows that businesses will continue to be cautious, and expectations for the December quarter are slightly below actual capital expenditure in the September quarter,” he said.
Click here to download the Business Confidence graph
Click here to download the December quarter results