Local business confidence slides

Submitted 13/07/2010

Migration for Business Growth

 

Business confidence has continued to decline during the June 2010 quarter.

The Commonwealth Bank Business SA Survey of Business Expectations for the June quarter showed that the South Australian confidence index decreased 26 per cent to 91 points.

It is the second consecutive decrease in business confidence following a rise in confidence in mid to late 2009.

The slide in confidence for the June quarter is being attributed to the continued increases in interest rates, the proposed Resource Super Profits Tax, the European sovereign debt crisis and the uncertainty associated with the Federal election.

The total sales revenue index decreased by 15 per cent, however, both general business conditions and total sales revenue are expected to be slightly higher next quarter.

Half of survey participants expect the Australian dollar to decrease in the next quarter, while a large proportion of the remainder predicted it to remain stable.

The June quarter 2010 survey also asked businesses about the national policies of the Federal Government, and about their cash flow and banking visibility.

More than half of businesses indicated that fiscal policy (taxation and government spending) needs urgent addressing by the next Federal Government.

An overwhelming 98 per cent strongly agreed or agreed that the Federal Government should provide a comprehensive response to the Henry Taxation Review.

Over 90 per cent stated that the Commonwealth Government should take over control of the Murray-Darling Basin.

Almost one third of the surveys' respondents stated that they often had difficulties managing their cash flow because their customers were not paying their bills. 61 per cent indicated that it was essential to have full visibility over their banking.