Business confidence slips below GFC levels: CCIQ


New survey shows business confidence in the Australian economy has fallen to levels lower than the June quarter 2009

Business confidence slips below GFC levels: CCIQ
Business confidence slips below GFC levels: CCIQ
July 30, 2010

A combination of interest rates, wage pressures, energy prices and taxes has seen business confidence in the Australian economy drop to levels lower than those experienced at the height of the GFC, new data reveals.

The latest Commonwealth Bank Chamber of Commerce & Industry Queensland (CCIQ) Pulse Survey of Business Conditions reflects a poor outlook for both the state’s businesses and wider economy - even in comparison to the same time last year when the slowdown was at its worst.

CCIQ President David Goodwin confirms confidence has fallen sharply over the June quarter with a significant decrease in the Australian Economic Conditions Index, from 65.5 to 50.1.

"Total sales revenue has contracted sharply from 50.7 to 45 whilst at the same time, the Profitability Index has continued to trend downwards, falling from 44 in the previous quarter to 39.5," Goodwin says.

"Not surprisingly, confidence in the Queensland economy has also fallen with only 26 percent of respondents expecting our state economy to strengthen over the next quarter," he says.

Despite a decline in confidence, sales and profitability, 59 percent of respondents reported equal employment levels over the past three months.

"This is in part due to business continuing to dig into their pockets to keep employees on board for when things inevitably improve," Goodwin explains.

"Interestingly businesses reported the single biggest change in the last quarter to be political and economic stability and this is now having a profound impact on business and consumer confidence," he says.

"Businesses are finding it increasingly difficult to keep their heads above water when interest rates, wage pressures, energy prices and business taxes continue to mount."

BARRIERS TO BUSINESS

According to the report, significant contributing factors in the decline in spending have been a lack of confidence in government and their management of the economy.

"Business is really struggling. Queensland needs a business friendly operating environment to be able to grow, invest and protect our economy," Goodwin says.

"Surely there is more the government can be doing to support business and our economy," he says.

The Pulse Survey has been measuring Queensland business confidence and expectations for over 20 years and is published in cooperation with the Commonwealth Bank.

The survey provides a comprehensive snapshot of Queensland business sentiment with over 850 Queensland businesses interviewed as part of each survey.

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