Northern Rivers businesses are more optimistic heading into the Christmas quarter, according to the latest NSW Business Chamber – Commonwealth Bank Business Conditions Survey.
“Strong indicators for the Northern Rivers region for the crucial Christmas quarter are helping to lead a return to an optimistic outlook in the overall state-wide results of the survey,” Northern Rivers NSW Business Chamber Regional Manager, John Murray said.
“The message to take away from our latest survey of Northern Rivers businesses is that economic conditions continue to pose significant challenges for businesses across the board in the face of dampened consumer confidence, tough export competition with the higher dollar, and a Federal Government that sees the business sector as a cash cow to help engineer its surplus promise.
“It’s encouraging to see that Northern Rivers business operators believe business conditions, sales revenue and profits will be stronger in the next quarter – however their hopes have been dashed before. It will come down to whether consumers return to the shops this Christmas.”
The NSW Business Chamber – Commonwealth Bank NSW Business Conditions Survey of Northern Rivers businesses found:
n30% of businesses reported that the current performance of the NSW economy was weaker than the previous quarter. This compares with 18% who said it was stronger. This is expected to improve in the coming quarter with 18% of businesses expecting the economy to weaken further, while 30% said it would strengthen;
n29% of businesses reported that business conditions have declined in the current quarter compared to 23% who reported an improvement in conditions. Expectations for the next quarter are positive, with 26% expecting an improvement compared to 20% expecting further decline;
n33% of businesses reported increased sales this quarter and 31% reported a decrease in sales. 38% of businesses expect sales revenue to increase in the coming quarter and 25% expect sales revenue to decrease in the coming quarter;
n38% of businesses reported deterioration in profitability (compared to 23% who reported an improvement). 24% expect a deterioration in profitability in the coming quarter (compared to 30% who expect an improvement);
n22% of businesses reported a tightening of access to finance and 15% expect a further tightening in the coming quarter; and
n12% of businesses reported that the cost of finance has risen, and a further 14% believe it will continue to rise in the next quarter.
Michael Workman, Senior Economist at the Commonwealth Bank, said the NSW Business Conditions Survey continues to show weak outcomes for most businesses surveyed.
“The international backdrop remains generally negative for both consumer and business confidence, with regular bursts of poor news from the European Union’s debt problems adversely influencing financial market sentiment,” he said.
“The Federal Government’s compensation payments to households had a limited effect on overall spending and business outcomes over the September quarter. In a somewhat optimistic outcome, most of the respondents to the survey indicated that they expected business conditions to remain about the same, or possibly be somewhat stronger, over the next three months.
“It may be that survey respondents see the recent interest rate cuts as being slightly positive for business conditions. It is interesting that, while NSW is regarded as being in the “slow lane” of the national two-speed economy, its economic outcomes have been in line with its own longer-run trends.”
