Thursday 3 March, 2016
Business confidence in South Australia has dropped despite consumer confidence remaining steady, according to the latest BankSA State Monitor survey.
The survey shows that business confidence recorded a 5.3 point drop since the last survey in October, from 105.2 points to 99.9.
While overall consumer confidence had increased marginally (by 0.5 points) during the same period, it remained low at 100.6 points.
BankSA Chief Executive Nick Reade said the survey results reflect the ongoing economic challenges faced by South Australia.
“It is encouraging to see that consumer confidence in South Australia is fractionally up since the last survey, however it is still low by historical standards,” Mr Reade said.
“The subdued state of the economy and the impact of low economic growth on wages, job security and employment mobility continues to constrain consumer sentiment.”
Mr Reade said the decline in business confidence – the lowest recorded since May 2013 – is particularly concerning.
“The results indicate a subdued outlook among South Australian business owners, which is constraining investment and a willingness to hire more staff,” he said.
“There are obviously exceptions, but the prevailing view among many local businesses is to wait until broader market conditions improve before making any major decisions regarding growth.
“While Federal election years also tend to produce more uncertainty amongst consumers and businesses it also provides a great opportunity for our political leaders to adopt policies that support Australia’s SME business sector, which remains a significant driver of both South Australian and national productivity.”
South Australia’s rural regions also reported mixed outcomes, with overall results showing consumer confidence in the regions rose by 5.3 points from October to February (93.2 to 98.5), while business confidence fell 8.1 points from 105.3 to 97.2.
Key findings from South Australian’s rural regions reveal:
CONSUMER CONFIDENCE – RURAL
- The Southern region (South Coast, South East, Hills and Murray Plains) recorded the highest level of consumer confidence at 106.3 points – a rise of 14.0 points from 92.3 points in October.
- The West and North region (Iron Triangle, Far North and Eyre Peninsula) recorded the lowest levels of consumer confidence at 84.5 points, however it was a slight increase from 82.6 points in October.
- The Mid North and Riverland region (Barossa, Mid North, Riverland and Yorke Peninsula) recorded consumer confidence levels of 101.3 points (down slightly from 104.9 in October).
BUSINESS CONFIDENCE - RURAL
- The Mid North and Riverland region (Barossa, Mid North, Riverland and Yorke Peninsula) recorded the highest level of business confidence amongst the regions at 102.5 points (albeit down from 107.5 points in October).
- The West and North region (Iron Triangle, Far North and Eyre Peninsula) recorded the lowest levels of business confidence at 89.5 points (down from 91.8 points in October).
- While not the lowest overall, the Southern region (South Coast, South East, Hills and Murray Plains) recorded the largest drop in business confidence levels – down 16.8 points from 115.1 points in October to 98.3 points.
Based on a statewide phone survey of 300 consumers and 300 small business owners and managers, the latest BankSA State Monitor is the 59th monitor in a series that has tracked consumer and business confidence in South Australia since 1997.
The results are measured against a baseline of 100, which represents a balance between the number of optimists and pessimists. If the index is above 100, it means there are more optimistic respondents than pessimistic, however if the index is below 100, it means there are more pessimistic respondents than optimistic.