The March 2016 Business Conditions Survey conducted by the NSW Business Chamber, the state’s peak business organisation, shows that while business conditions in the Northern Rivers remain relatively positive, fewer businesses are optimistic about the state’s economic performance than in previous quarters.
“Our survey of close to 80 local businesses reaffirms the mostly favourable business conditions recorded over the latter half of 2015, but there has been a reduction in respondents’ optimism about the performance of the state’s economy,” said NSW Business Chamber Northern Rivers Regional Manager, John Murray.
“While both the March quarter’s actual and next quarter’s forecast results still show more local businesses reporting and expecting improvements than declines across key performance indicators such as sales revenue, capital spending and total staff numbers, the gap has narrowed.
“This quarter we have seen a somewhat surprising decline in local business’ perceptions of the state’s economic performance, which dropped three points on the index. This fall is much smaller than the state-wide decline of 15 points, and it remains to be seen whether this result represents a turning point for the region and NSW more broadly or whether it is an isolated moderation in line with what is typical for the first quarter of the year.
“Although 42% of local businesses reported an increase in sales revenue, an overall dip in sales revenue was recorded on the index for Northern Rivers businesses this quarter. This is however consistent with previous first quarter results across the state as revenue typically falls in the retail and hospitality sectors after the busy holiday sales period and this indicator still remains well into positive territory on the index.
“The news is less positive for total profits, with the number of Northern Rivers businesses reporting decreases in total profits still outweighing the number of businesses reporting increases, putting this indicator further into negative territory on the index.
“28% of Northern Rivers business reported an increase in capital spending for the March quarter, up from 25% in December 2015, while close to a third of businesses surveyed said they expect spending to increase in the second quarter of 2016.
“20% of businesses surveyed said they increased overall staff numbers in the past three months, slightly up from 19% in the previous quarter. Just 9% of businesses expect to increase staff numbers in coming months, which is significantly less than the state-wide average of 17%.
“Overall business conditions in the Northern Rivers remain favourable, but this survey takes some of the gloss off the stellar results recorded in the region in the previous two quarters. The June quarter results will give a clearer indication of where the momentum lies.
“With budget season approaching, there is clearly an opportunity for governments at both the state and federal level to implement tax and spending plans that make it easier, rather than harder, for businesses to grow and employ more staff,” Mr Murray said.