Increased confidence provides foundation for resilience during COVID-19 recovery
Saturday, 28 November 2020
South Australian confidence is showing its strongest signs of recovery since COVID-19 began, according to the latest BankSA State Monitor survey.
Business confidence reported its largest ever increase, rising by 20.3 points to 125.6 points. Consumer confidence increased for the third consecutive survey, up 5.4 points to 115.7, reaching a seven-year high.
BankSA Chief Executive, Nick Reade, said these figures, taken immediately before the latest three-day circuit breaker event, demonstrate that the state has an increasingly strong foundation to weather these events when they are necessary.
“We’ve been fortunate in South Australia that we’ve had many months of relatively few restrictions after the initial pandemic hit, and this has allowed businesses and consumers to regain confidence as we adjust to living and operating in a ‘COVID normal’ environment,” he said.
“This will provide a level of resilience in our economy when events do occur,” he said.
“While there’s no doubt that the most recent ‘circuit-breaker’ restrictions impacted South Australians – and in particular, small businesses - we’re hoping the disruption to business and its economic impacts will be short-lived as we head into the busiest trading period of the year – including the Black Friday sales and Christmas lead-in.”
The BankSA State Monitor found confidence in the outlook for the next 12 months was also growing, with consumer spending intentions improved by 27 per cent, along with the climate for doing business recording a 22 per cent net positive shift, and both reaching their highest levels in a decade.
People are more confident about their own financial position over the next 12 months, rising by 6 per cent, and businesses recorded a 19 per cent increase.
“All of our indicators show that in recent months, people have spent time considering their personal and business finances. They’re saving more, they’re paying down debt,” said Mr Reade.
The survey supports this with occurrences of consumers making a major purchase in the past three months at the lowest level in four years, and a declining intention to make a major purchase in the coming three months.
However, businesses are spending more, with a 7 per cent increase in those likely to make a major purchase in the coming 12 months. Additionally, there was an 18 per cent increase in businesses that had created additional employment over the past three months, and a 25 per cent increase in those who intend to in the coming three months.
“Businesses are utilising their ability to grow and invest in their businesses with interest rates at record lows, and a range of supports and government incentives,” said Mr Reade.
Consumer confidence in finding suitable work rose by 18 per cent, and fewer people were worried about losing their job, falling from 59 per cent to 42 per cent.
Confidence levels for males and females have also increased, with men more confident than women. Blue collar workers recorded their third consecutive increase, recording higher confidence levels than white collar workers for the first time since 2016.
Across both metropolitan and regional areas, the most confident industries were community service, manufacturing and agriculture, with construction, wholesale/retail and finance reporting the largest increases this survey.
In regional South Australia the results were also overwhelmingly positive. Regional consumer confidence increased by 12.7 points (from 103.6 points to 116.5 points), and business confidence increased 16.9 points (from 111.9 to 128.8 points).
The survey recorded higher scores for both consumer and business confidence in all regions for the second consecutive survey, with each well above the 100 index-point benchmark. Rural areas were also more confident than metropolitan South Australia for the first time in two years.
Across all regions and demographics, the factors cited for generating the most optimistic scores for both consumers and businesses were the state and the national response to COVID-19, and South Australia’s long-term outlook for the future.
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 73rd 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.