More jobs as business confidence consolidates at eight-year high
Saturday, 10 November 2018
Confidence among South Australian businesses has held firm at an eight-year high and is leading to new jobs, according to the latest BankSA State Monitor released today.
Conducted by an independent research firm, the latest BankSA State Monitor shows a sharp rise in the number of businesses which have created additional employment in the past three months and those intending to create more jobs over the next three months.
The number of South Australian businesses which have employed new staff over the past three months has spiked to the highest level since 2010, while the number of businesses that intend to create more jobs over the next three months has jumped to the highest level since 2007.
The employment findings are consistent with figures released by the Australian Bureau of Statistics last month showing that South Australia’s unemployment rate had fallen to 5.5%, now the third lowest figure in the country behind New South Wales and Victoria.
BankSA Chief Executive, Nick Reade, said the business confidence results showed that increased confidence in the South Australian economy was now leading to real outcomes.
“This year has marked a turnaround for South Australian businesses. Since dropping to a four-year low in August 2017, business confidence has steadily grown, with these latest results holding firm at the eight-year high we reached in July,” Mr Reade said.
“Importantly, this confidence is now translating to investment and growth with businesses starting to employ more workers. This is welcome news for jobseekers and the economy overall, particularly with the intent to create more employment in the lead-up to Christmas at its highest level in more than a decade.
“Significantly, businesses also reported a far greater intent to make a major purchase over the next year, such as office equipment, cars or commercial real estate. In fact, this measure has reached its highest level since 2000.”
Overall, business confidence in South Australia has remained steady since the last BankSA State Monitor survey in July, holding firm at 119.0 index points compared to 119.2 in July, which was the highest level of business confidence recorded since the end of the global financial crisis in 2010.
Sustained confidence among local businesses has been attributed to increased optimism about the climate for doing business in South Australia, including greater intention among businesses to make major purchases over the next 12 months.
While business confidence remained steady, consumer confidence in South Australia dipped slightly from the four-year high posted in the July survey – down 3.1 points from 109.4 to 106.3.
Importantly though, consumer confidence remains above the 100-point baseline, as it has done for all three BankSA State Monitor surveys in 2018 – a positive turnaround since hitting a 20-year low of 96.3 points in November last year.
“Consumer confidence has fallen slightly over the past quarter, but on an annualised basis is at its highest level in four years, with South Australians maintaining strong confidence in the climate for consumer spending over the next 12 months,” Mr Reade said.
Other key findings from the latest BankSA State Monitor include:
- The state’s manufacturing sector has reported its highest confidence level since 2004;
- Consumer intention to make a major purchase in the next three months increased, despite ongoing job security and cost of living pressures;
- Consumers aged between 18-24 are the most confident in the state;
- Male consumers are more confident than female consumers for the sixth consecutive survey; and
- White collar workers are more confident than blue collar workers for the eighth consecutive survey.
Meanwhile, confidence levels in South Australia’s rural regions are now almost the same among businesses and consumers. While the total business index score for rural SA dropped 8.0 points from 115.9 to 107.9, overall consumer confidence in the regions rose 7.3 points from 102.6 to 109.9.
State Monitor findings for South Australia’s rural regions include:
West and North (Upper Spencer Gulf, Far North and Eyre Peninsula):
- A decrease in business confidence – down 10.3 points from 112.7 to 102.4; and
- A decrease in consumer confidence – down 2.9 points from 119.0 to 116.1.
Southern (South Coast, South East, Hills and Murray Plains):
- A decrease in business confidence – down 3.1 points from 118.0 to 114.9; and
- An increase in consumer confidence – up 12.8 points from 98.6 to 111.4.
Mid North and Riverland (Barossa, Mid North, Riverland and Yorke Peninsula):
- A decrease in business confidence – down 12.3 points from 115.7 to 103.4; and
- An increase in consumer confidence – up 6.9 points from 97.7 to 104.6.
Based on a statewide phone survey of 300 consumers and 300 small business owners and managers, conducted by the Sexton Marketing Group, the latest BankSA State Monitor is the 67th monitor in a series that has tracked consumer and business confidence in South Australia since 1997. A baseline of 100 points is used to which the overall survey results are either added or deducted. A result greater than 100 represents a positive result and therefore more optimistic respondents than pessimistic, while a result less than 100 represents a negative result meaning there are more pessimistic respondents than optimistic.