SA business sentiment up – with caveats
Despite significant South Australian concerns about unemployment, local consumer confidence levels have risen, the latest BankSA state monitor survey has found.
The February results released today shows consumer confidence rose slightly since the last survey was conducted in August 2014.
The monitor is based on a state-wide telephone survey of 300 consumers and 300 small business owners and managers.
The small rise in the index – from 104.3 to 105.2 index points – is well above the historic low of 98.4 points recorded in May 2014.
The monitor showed business confidence also lifted slightly, from 105.8 in August 2014 to 107.6 index points in February.
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Business confidence is now at its highest level in the survey since August 2013.
BankSA chief executive Nick Reade said that while the results were positive, consumer sentiment was still below the historical average, which is above 110 index points.
“The main concern about the consumer confidence result is that its rise has been driven on the back of a few primary measures, as opposed to having broad underpinnings across a large range of measures,” he said.
“It’s particularly concerning to see a significant increase among consumers in relation to concerns about the risk of unemployment (27% net increase), perceptions that small business continues to struggle (8% net increase) and no perceived improvement in the consumer spending climate (1% net increase).”
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Younger respondents were concerned about their future, given high unemployment.
“Whether consumer confidence continues to rise will depend heavily upon shifts in other measures, including the outlook for consumer spending, incomes relative to cost of living, strong political leadership, greater certainty about federal budget measures, and strong business leadership and investment in South Australia,” he said.
The monitor finds that the main driver for the lift in business confidence is optimism that 2015 will be a better year for business generally (9% net increase). Other factors include low fuel prices, a low dollar helping export earnings, low interest rates and a boost to consumer spending over the Christmas period.
“However, businesses are not any more confident about their ability to hire staff or buy major business items, compared with last year,” BankSA said.
“In addition, businesses remain doubtful about the outlook for their own businesses, despite being more optimistic about the outlook for businesses generally.”
In other business results, the monitor found:
- A net 12% increase to businesses taking on additional staff in the past three months.
- A net 6% increase to businesses adapting to new technology.
- A 9% net fall in business attitudes to their own situation.
- A 5% net fall in confidence that their own business performance will improve in the next 12 months.
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