South Australians start new decade with a turnaround in confidence and state pride
Friday, 28 February 2020
Confidence amongst both businesses and consumers has increased providing a solid start to 2020, according to the latest BankSA State Monitor released today.
Conducted by an independent research firm during February, the BankSA State Monitor shows that business confidence increased to reverse four consecutive declines, lifting 10.2 points to 115.4 points – the most positive result in 12 months.
Consumer confidence also lifted 6.1 points between October and February, increasing from 95.2 to 101.3, reversing a declining trend over the past 18 months and returning to positive territory.
BankSA Chief Executive, Nick Reade, said the results indicated that consumers had a greater appetite to spend and the mood amongst businesses was more buoyant.
“South Australian consumers increased their spending, which is not unusual over the Christmas and holiday season, but importantly they are indicating a greater intention to continue to spend over the coming months.
“This was also reflected in business activity, with additional employment created over the past three months at the highest levels reported in nearly a decade.
“Mood is an important part of the South Australian psyche and a strong indicator of how well our state is doing, so it is pleasing to see both businesses and consumers reported increased confidence in outlook for the coming 12 months, and a more positive mood about their own situation – recording the largest increase of all measures for businesses.”
Pride in South Australia was also strong across both businesses and consumers. Businesses reported a 20 per cent leap in state pride - the strongest increase reported since the BankSA State Monitor commenced in 1997. Consumer pride also lifted nine per cent.
The monitoring was conducted in early February – coinciding with growing global uncertainty over the spread of coronavirus and in the aftermath of the bushfires which significantly impacted Kangaroo Island and the Adelaide Hills.
Mr Reade, said that without the coronavirus cloud hanging over the global economy, business confidence may have been even higher.
“Conversely, there are strong indications that the bushfires may actually have lifted pride as South Australians rallied to aid the recovery of the state’s fire affected communities,” he said.
Other key findings from the latest BankSA State Monitor:
- Contextual factors contributing most to business optimism: performance of share market; employment and income security; own household financial position; Australia’s long-term outlook for future.
- The largest increases in business confidence were around: mood about own current business situation; state pride; improvement in own business performance; and not being affected by a downturn in turnover.
- The most confident industries are community services; agriculture; and finance.
- The construction industry had the lowest confidence, recording its lowest result in four years.
- Contextual factors contributing most to increased consumer optimism: interest rates; South Australia’s long-term outlook for the future; own household position; investment in infrastructure.
- The largest increases in consumer confidence were around: likelihood to make a significant purchase in next three months; adoption of new technology; could change to a better job if needed; and making a significant purchase in past three months.
- The increase in consumer confidence has been driven by positive movements in the 35-49 and 65+ age groups; blue collar employees; retirees and metro-based respondents.
- Consumer confidence has trailed business confidence for the past eight surveys.
BankSA State Monitor results for regional South Australia showed an increase in business confidence from 102.3 to 109.3 points, however consumer confidence remained below the 100-point baseline, marginally decreasing from 92.1 to 92.0 points. Findings for South Australia’s rural regions include:
West and North (Upper Spencer Gulf, Far North and Eyre Peninsula):
- A decrease in consumer confidence – down 15.2 points from 91.3 to 76.1 (recording the region’s lowest confidence level ever reported); and
- A small increase in business confidence – up 0.8 points from 104.4 to 105.2 (reversing declines over the previous two surveys).
Southern (South Coast, South East, Hills and Murray Plains):
- An increase in consumer confidence – up 9.7 points from 93.6 to 103.3 (extending its position as the most confident rural region for the past three surveys); and
- An increase in business confidence – up 4.5 points from 109.0 to 113.5 (extending its position as the most confident rural region for the past nine surveys).
Mid North and Riverland (Barossa, Mid North, Riverland and Yorke Peninsula):
- A marginal increase in consumer confidence – up 0.5 points from 90.5 to 91.0 (ending three declines and making it the second most confident region); and
- An increase in business confidence – up 11.0 points from 94.1 to 105.1 (recording the largest increase of all regions to return to positive territory).
Based on a statewide phone survey of 300 consumers and 300 small business owners and managers, conducted by the Action Market Research, the latest BankSA State Monitor is the 71st 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.