Confidence improves however South Australians remain cautious
Wednesday, 28 February 2018
Confidence levels have increased amongst South Australian consumers and businesses however they still remain cautious, according to the latest BankSA State Monitor released today.
Conducted by independent research firm, The Sexton Marketing Group, the BankSA State Monitor reveals that consumer confidence in South Australia has increased 5.4 points since the last survey in October, rising back above the 100-point baseline to sit at 101.7 index points.
However, South Australians still remain pessimistic about their own household finances and are cautious about making major purchases, primarily due to rising costs of living.
Business confidence also recorded a 3.4-point rise this month to reach 107.0 points after falling to a four-year low in July last year.
BankSA Chief Executive, Nick Reade, said while the latest results are encouraging, consumer and business confidence levels are still at relatively low levels historically.
“While the State Monitor does convey a positive start to 2018, the results are tempered by a cautious mindset that lingers among consumers and businesses,” Mr Reade said.
“For example, while businesses are more confident they will invest in plant and equipment in the next 12 months, they are less confident about taking on additional employment in the short term. And similarly, while consumers are more positive about the climate for spending in the coming 12 months, they are less confident that there will be a significant positive change in their own financial position.
“Consumer and business confidence in South Australia was a significant concern last year, so it’s promising to see some much-needed optimism returning to the state.
“South Australians like certainty and the upcoming State Election may also be contributing to some hesitation amongst both businesses and consumers currently.”
Rebounding from a 20-year low in October last year, consumers cited renewed positivity about employment mobility and that the climate for spending will improve over the next 12 months.
Consumers also recorded an increased perception that local businesses are growing again, while concerns relating to unemployment have eased.
Businesses also cited greater optimism about the climate for doing business in the next 12 months, and a higher perception that small business activity in the state is picking up overall.
Other key findings from the latest BankSA State Monitor include:
- 25-34 year-old consumers remain the most confident age segment in the state;
- The 65-plus age segment has rebounded after four consecutive decreases in confidence;
- Confidence levels for both male and female consumers have improved, with male consumers (107.2 points) still more confident than female consumers (96.5);
- Confidence levels for both white and blue collar workers have improved, with white collar workers (107.5 points) still more confident than blue collar (102.4);
- Rural consumers (104.5 points) are now more confident than metropolitan consumers (100.5); and
- The increase in business confidence is a result of improved results in the agriculture, manufacturing and recreational sectors.
Importantly, confidence in rural South Australia has bounced back after dropping to record lows in July last year, with the West and North; Southern; and Mid North and Riverland regions all recording increases in both consumer and business confidence. Overall, consumer confidence across the regions spiked 14.4 points to jump back above the 100-point baseline at 104.5, while business confidence rose 4.5 points to 102.3.
The BankSA State Monitor findings for the rural regions include:
West and North (Upper Spencer Gulf, Far North and Eyre Peninsula):
- An increase in consumer confidence – up 7.4 points from 109.4 to 116.8 (its highest level since May 2011); and
- An increase in business confidence – up 10.5 points from 92.2 to 102.7 (its biggest increase in business confidence since August 2014).
Southern (South Coast, South East, Hills and Murray Plains):
- An increase in consumer confidence – up 13.5 points from 83.9 to 97.4 (its biggest increase in consumer confidence in two years); and
- An increase in business confidence – up 0.8 points from 104.2 to 105.0 (the most confident rural region for the third consecutive survey).
Mid North and Riverland (Barossa, Mid North, Riverland and Yorke Peninsula):
- An increase in consumer confidence – up 18.6 points from 84.9 to 103.5 (the highest confidence increase across the regions); and
- An increase in business confidence – up 5.1 points from 93.5 to 98.6 (its second consecutive increase after reporting its lowest ever result in July last year).
Based on a statewide phone survey of 300 consumers and 300 small business owners and managers, the latest BankSA State Monitor is the 65th 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.