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RURAL CONFIDENCE CONTINUES TO FALL

Wednesday, 25 June 2014

Confidence levels among business owners and consumers in rural South Australia continue to fall, the latest BankSA State Monitor survey has found.

Conducted three times a year, the State Monitor has been tracking business and consumer confidence since late 1997. The June 2014 State Monitor marks the 54th time the survey has been undertaken.

Despite business confidence in the State’s Southern region rebounding since the February 2014 State Monitor, overall rural business confidence fell 0.8 index points to 105.3 in this month’s survey.

While there has been a fall since the last survey, results show that business confidence levels remain above 100 points, indicating that businesses in rural communities are more optimistic than pessimistic.

Conversely, consumer confidence levels across regional South Australia fell 9.2 index points to 96.2, indicating that people are more pessimistic than optimistic across regional South Australia.

Results show that on a regional basis, and when both consumer and business results are aggregated, all regions reported decreases since the February 2014 survey, with the Mid-North and Riverland region reportedly the most positive, and the West and North region the least positive.

The results from the business confidence survey indicate that:

  • The Southern region has rebounded in its results (from 102.9 to 108.5 index points) and is now the top ranking region for the first time since August 2008;
  • Declining 5.6 index points, the West and North region reported the largest decline and has subsequently dropped from being the most confident region in the last survey (108.6 index points) to the least confident this survey (103 index points); and
  • The Mid-North and Riverland region also reports a decrease of 2.6 index points to 104.2, retaining its position as the second best performing region.

All three regions reported declines in the direction of small business, however creating additional employment in the past three months increased for all, and particularly in the Southern region which recorded a rise of 26 index points.

Two of the three regions reported a decline in consumer confidence across the majority of measures this survey, including how they feel about the consumer spending climate (down 38 index points) and how they feel about their current household situation (down 30 index points).

On a region-by-region basis, the main findings of the BankSA State Monitor for June 2014 are as follows:

North and West (comprising Iron Triangle, Far North and Eyre Peninsula)

Business confidence in the North and West region decreased to 103 index points from 108.6 index points in February 2014.

A total of 46% of businesses expect improvement in their own business performance over the next 12 months, down from 49% in February 2014.

Only 28% of businesses expect to make a major purchase over the next 12 months, down from 41% in February this year.

Consumer confidence in this region declined to 93.3 index points in June 2014 from 108.3 index points in February 2014.

A total of 66% of consumers feel positive about their current household situation, down from 90% in the February survey.

Mid-North and Riverland (comprising Barossa, Mid-North, Riverland and Yorke Peninsula)

Business confidence in the Mid-North and Riverland region decreased to 104.2 index points from 106.8 index points in February 2014.

Only 28% of businesses expect to make a major purchase over the next 12 months, down from 40% in February this year.

A total of 53% of businesses expect their own business to improve over the next 12 months, up from 50% in the previous survey.

Consumer confidence in this region increased to 102.1 index points in June 2014 from 100.8 index points in February 2014.

Southern (comprising South Coast, South East, Hills and Murray Plains)

Business confidence in the Southern region increased to 108.5 index points from 102.9 index points in February 2014.

A total of 61% of businesses expect their own business to improve over the next 12 months, up from 57% in the previous survey.

A total of 73% of businesses are positive about their current business situation, up from 66% in February 2014.

Consumer confidence in this region declined to 93.9 index points in June 2014 from 106.9 in February 2014.