This graph has plotted the fall in business confidence revealed by the NSW Business Chamber.
This graph has plotted the fall in business confidence revealed by the NSW Business Chamber.

Tough times in business

BUSINESSES are continuing to experience the worst levels in business confidence in two years, a statewide survey of employers has found.

The NSW Business Chamber and Commonwealth Business Conditions Survey also found that current conditions are affecting business owners' previously optimistic view of the future.

"Businesses we've surveyed have always maintained an optimistic outlook for the next quarter, but that has clearly taken a turn for the worse in this latest survey and that should be of great concern," Mid North Coast NSW Business Chamber regional manager Kellon Beard said.

"NSW's economy is particularly feeling the effects of subdued consumer confidence, an uncertain global economic outlook and a high Australian dollar.

The nature of NSW's diversified economy such as retail, manufacturing, financial services, tourism and construction means that these challenges are all impacting on the overhaul strength of the state's economy.

"This is a tough time to be in business and no one should underestimate the need for businesses to buckle down and look at opportunities to innovate and reduce costs until the economy picks up.

"The results of our survey once again bring in to question the logic behind the Federal Government's push for a carbon tax this year.

"While Australia may be one of the few strong economies after the GFC, it would seem foolhardy to throw that advantage away on a policy that will have no impact on global carbon emissions.

"The feedback from business is that the introduction of the carbon tax will see a stampede of businesses exporting Australia's carbon emissions and jobs offshore - a result no one, including the Government, would want to see," he said.

The NSW Business Chamber and Commonwealth Bank NSW Business Conditions Survey found: 

30% of businesses report the current performance of the NSW economy was weaker than the previous quarter.

This compares with 24% who said it was stronger. 

This is expected to remain similar for the coming quarter with 30% of businesses expecting the economy to weaken further while 26% said it would strengthen; 

30% of businesses report that business conditions have declined in the current quarter compared to 22% who reported an improvement in conditions. 

Expectations for the next quarter are negative with 30% expecting further decline compared to 22% expecting an improvement. 33% of businesses report increased sales this quarter and 37% report a decrease in sales.  32% of businesses expect sales revenue to increase in the coming quarter and 36% expect sales revenue to decrease in the coming quarter;  40% of businesses report deterioration in profitability (compared to 26% who report an improvement). 37% expect a deterioration in profitability in the coming quarter (compared to 29% who expect an improvement); and  26% of businesses report a tightening of access to finance and 18% expect a further tightening in the coming quarter.

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