Business profitability and confidence has taken a hit from rising operating costs and there are signs of a contraction in business investment according to the latest Business Conditions Survey, conducted by the state’s peak business organisation, the NSW Business Chamber.
Survey results point to the first sustained signs of a slowdown in business expansion with respondents reporting a reduced pace of growth in capital spending and staffing. Respondents also noted that business profits had reduced due to the persistence of increasing cost pressures.
Although business operators remain upbeat about their prospects, and the broader economic outlook, it is essential the NSW Government continue to deliver reforms that reduce operating costs on business, deliver training that addresses critical skill shortages along with measures that encourage business investment.
Energy has topped the list of priorities for the region, with 60% hoping to reduce this overhead to keep their business profitable.
Local businesses are paying some of the highest energy prices in the world, which is crazy given our strong reserves of natural gas and coal resources, and ideal locations for renewable alternatives. Local businesses and households need to see improvements in energy affordability now.
Now is not the time for complacency or caretaker measures. The NSW economy is transitioning away from a significant residential construction boom and the government needs to deliver on its next wave of public infrastructure plans.
Regional projects that can be funded from the NSW Snowy Hydro Legacy Fund need to be progressed as soon as possible to ensure NSW maintains economic momentum. These projects should include measures to drive long term economic development and provide essential infrastructure to help address issues such as drought mitigation and improved transport connectivity.
Staff skills remain a priority for businesses looking at remaining competitive, with businesses looking for the strong personable attributes such as team work, problem solving and self-management mixed with industry knowledge and experience to fill local vacancies.
The survey notes that business conditions are not uniform across the state. The Hunter Valley, Newcastle and Lake Macquarie have been particularly strong over the past year while conditions are weaker in Northern NSW including the New England North West, Western NSW and Far North Coast region.
To keep NSW the number one performing state in Australia we need a concerted effort to reduce operating costs for business, deliver critical skills training (particularly for young job seekers) and fast track the delivery of infrastructure that will provide long term economic and community benefit. You can read the full survey online.
As always, if you want to talk business, have an opinion on what needs to be done to grow regional NSW we are always looking for authentic local stories to help our advocacy efforts so please don’t hesitate to email me or call 0429 993 822.
Joe Townsend, Regional Manager, New England North West
The article originally appeared on NSW Business Chamber, click here to view.