SA business confidence at record high heading into lockdown showing strong underlying momentum
Friday, 30 July 2021
Business confidence in South Australia reached its highest level ever recorded by the BankSA State Monitor survey heading into the state’s recent lockdown, as industries project a positive outlook beyond the COVID pandemic.
The independent survey conducted between 6-12 July found business confidence had increased by 4.7 points to 134.6 points, the highest confidence level recorded in the 24 years of the BankSA State Monitor survey.
The survey also revealed that while consumer confidence decreased by 3.1 points to 121.8 points, it was still the second highest result since October 2010.
BankSA State General Manager Business Banking, David Firth, said these results show the strong economic momentum heading into the state’s recent seven-day lockdown.
“South Australian businesses were increasingly positive, with the transport, finance and recreational industries expressing the most optimism,” Mr Firth said.
“The number of businesses who felt better about their own business situation compared with February had increased 5 per cent, while 13 per cent more businesses said it is likely they will make a major purchase in the next 12 months such as office equipment, cars or commercial real estate.
“Businesses also pointed to stronger turnover, with 12 per cent more reflecting a positive view towards existing and future turnover. They also have more confidence in using new technologies.”
Mr Firth said confidence in current and future employment prospects continued to grow for both consumers and businesses.
“Positive job prospects increased both consumer and business confidence levels, which would appear to support strong jobs growth in the coming 12 months,” Mr Firth said.
The number of businesses that have created employment in the past three months has increased by 8 per cent, and 12 per cent more say they expect to create jobs in the next three months. Similarly, the number of households who have expressed an ability to find work or remain in their current jobs over the past three months has increased by 6 per cent.
Mr Firth said while the July survey was completed before the state’s latest lockdown, the results showed clear positive momentum that positioned the state well to manage these events.
“Because the lockdown was so short, and there were financial support measures provided by the government, we expect the impact on confidence to be limited,” he said.
“There might be a slight dip in confidence as the challenges of the pandemic continue, however South Australia has managed outbreaks incredibly well and this will continue to support confidence.”
Mr Firth said while consumer confidence dipped slightly in July, it is still among the highest levels seen in more than a decade.
“We did see a decrease in consumers’ confidence in their own financial position over the coming 12 months,” said Mr Firth.
“However, in other measures that have seen a reduction – such as household likelihood to be considering major purchases and feeling about own household situation – they are still at high levels with more respondents positive than not.”
Consumer and business confidence in South Australia’s rural regions had both decreased in July, with consumer confidence falling by 6.8 points to 119.7 points, while regional business confidence fell by 3.3 points to 131.9 points.
“The southern region made up of the South Coast, South East, Hills and Murray Plains remains the most confident, while we’ve seen the greatest fall in confidence in consumers in the west and north region,” said Mr Firth.
“All regions still have high levels of confidence despite some reductions and are well into positive territory compared with the benchmark rating of 100.”
The State Monitor is unique as the only survey that measures just South Australian consumer and business confidence. 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 75th 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.