Much needed lift in consumer and business confidence leads to increased spending
Friday 5 August, 2016
Confidence in South Australia has grown leading to increased spending among consumers and businesses, the latest BankSA State Monitor survey has found.
Released today, the July State Monitor shows that consumer confidence is up by 6.5 points, from 100.6 to 107.1, since the last survey was conducted. Business confidence also rose during the same period, increasing by 3.2 points from 99.9 to 103.1.
Importantly, the lift in optimism is translating into spending behaviour, with the survey revealing there has been an increase in major purchases among consumers over the past three months, in addition to an increase in intentions among both consumers and businesses to make a major purchase in the coming period.
BankSA Chief Executive, Nick Reade, said the survey results indicate a fundamental and positive shift in attitudes among consumers and businesses, albeit from a low confidence base.
“South Australia has experienced its fair share of challenges in recent years, which has taken a toll on the state’s consumer and business sentiment, so it’s great to see this rebound in confidence,” he said.
“Importantly, the state’s lift in optimism is translating into spending behaviour, with consumers spending more, and businesses planning to invest in plant, equipment and additional staff in the coming three months to support future growth.
“It’s still far from smooth sailing, as the survey indicates, but greater optimism about the outlook for the next 12 months is certainly encouraging and augers well for the South Australian economy.”
Other key findings from the BankSA State Monitor include:
- Lower concern among consumers relating to unemployment impacting their household;
- Improved consumer confidence about ability to change jobs if required;
- Greater intent among businesses to create new jobs in the next three months;
- Increased confidence among businesses about adopting new technology;
- Businesses recorded a significant increase in pride in South Australia, while consumers recorded a drop in state pride;
- 18-24-year-old consumers are the most confident age segment; and
- Confidence levels for females remains higher than males (consumer confidence among females rose 7.1 points to 109.2, compared to consumer confidence among males which rose 5.6 points to 104.9).
Mr Reade said the consumer and business confidence indexes now sit back above the baseline of 100, at which point the number of optimists in the community equals the number of pessimists.
“By historical standards, confidence levels are still low, but in relation to the challenges of recent years, the results for 2016 are showing some promising signs of a turnaround,” he said.
“The 6.5 point rise in consumer sentiment is the best improvement in three years, while business confidence has rebounded from the three-year low of 99.9, reported in February, to be back above the 100-point baseline.”
South Australia’s rural regions also reported promising results, with overall figures showing consumer confidence in the regions rose by 7.8 points from February to July (98.5 to 106.3), while business confidence increased by 1.9 points from 97.2 to 99.1.
Significantly, all rural regions reported an increase in consumer confidence, with all near or above the 100 points benchmark. Key findings from the rural regions include:
West and North (Upper Spencer Gulf, Far North and Eyre Peninsula)
- An increase in consumer confidence – up 15.4 points to 99.9; and
- An increase in business confidence – up 6.2 points to 95.7.
Southern (South Coast, South East, Hills and Murray Plains)
- An increase in consumer confidence – up 0.5 points to 106.8; and
- An increase in business confidence – up 4.3 points to 102.6.
Mid North and Riverland (Barossa, Mid North, Riverland and Yorke Peninsula)
- An increase in consumer confidence – up 10.0 points to 111.3; and
- A decrease in business confidence – down 5.4 points to 97.1.
Based on a statewide phone survey of 300 consumers and 300 small business owners and managers, the latest BankSA State Monitor is the 60th monitor in a series that has tracked consumer and business confidence in South Australia since 1997.
The full State Monitor report can also be viewed.