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SA business confidence up but fears grip consumers

Business

Latest economic feedback from SA business indicates confidence is up but job security has consumers concerned for their futures.

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Business confidence in Adelaide and South Australia has rebounded, however, consumers remain less optimistic about their economic future, a long-standing state survey reveals.

In figures released today by the BankSA State Monitor Survey, overall business confidence had increased by 4.5 per cent, from 100.7 points to 105.2 points, since June this year but job security and a reluctance to make major purchases was stymying consumer certainty.

“It’s really pleasing,” BankSA chief executive Nick Reade told InDaily of the rebound in business positivity.

“Businesses are willing to invest and feel a bit more confident about things.”

Reade attributed low interest rates, the Australian economy “not looking too bad”, optimism triggered by new Prime Minister Malcolm Turnbull and flow-on from the past state and federal budgets for the upswing in business confidence.

He said this translated into a transitional period of businesses expressing their intention to invest and create employment during the next three months.

“So the next survey we’ll see if that takes hold.”

Counter to the rise in business confidence, consumers had a slightly subdued response to their economic future.

“The consumer confidence level has only dropped slightly since the last survey, but it remains at the second lowest level since the survey began in 1997,” Reade said.

“Consumers are also reporting a significantly lower intention to make major purchases in the next three months, which is of concern in the lead-up to Christmas.”

The survey shows that South Australians in the 18-24 year age group recorded the lowest level of confidence about their household situations.

The statewide phone survey of 300 consumers and 300 small business owners and managers is carried out three times a year.

The current survey results are the 58th monitor in a series that has tracked consumer and business confidence in South Australia since 1997.

STRATEGY & MARKETING

The results are measured against a baseline of 100, which represents a balance between the number of optimists and pessimists.

Consumer confidence about individual household situation declined 3 per cent to 70 per cent, with the lowest levels recorded in the 18-24 year age group.

Further, 44 per cent of consumers say they have been affected by, or are worried about, unemployment – up from 33 per cent last survey, again with 18-24 year olds most worried and recording their highest ever score on this measure.

Only 19 per cent of consumers say they are likely to make a major purchase in the next three months, down from 27 per cent in June.

South Australia’s rural regions also reported mixed outcomes, with overall results showing consumer confidence fell 2.3 points from June to October (from 95.5 to 93.2), while business confidence fell 2.9 points (from 108.2 to 105.3).

Key business confidence findings from South Australian’s rural regions show:

The Southern region (South Coast, South East, Hills and Murray Plains) recorded the highest levels of business confidence at 115.1 points (down slightly from 115.8);

The Mid North and Riverland region (Barossa, Mid North, Riverland and Yorke Peninsula) recorded an increase in business confidence levels at 107.5 points (up from 104.4); and

The West and North region (Iron Triangle, Far North and Eyre Peninsula) recorded its third consecutive decrease and is now at its lowest ever level at 91.8 points (down from 105.6).

Key consumer confidence findings from South Australian’s rural regions show:

The Mid North and Riverland region (Barossa, Mid North, Riverland and Yorke Peninsula) recorded the highest levels of consumer confidence at 104.9 points (up from 93.1);

The Southern region (South Coast, South East, Hills and Murray Plains) recorded slightly reduced consumer confidence levels of 92.3 points (from 93.7); and

The West and North region (Iron Triangle, Far North and Eyre Peninsula) recorded a decrease and is also now at its lowest ever level at 82.6 points (down from 97.9).

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