Business operators are excited about the year ahead with confidence at near record highs according to the latest Business Conditions Survey, conducted by the state’s peak business organisation, the NSW Business Chamber.
The index, which measures respondents’ perceptions of the economy rose to 21.8 points, almost doubling the results of the previous quarter.
“The perceived strength in the state’s economy is the key driver behind business growth and investment but cost pressures remain a drain,” said NSW Business Chamber Chief Executive, Stephen Cartwright.
“Particularly strong results were recorded for both the capital spending and staffing indices indicating NSW businesses are expanding at a healthy pace and are optimistic about the future,” Mr Cartwright said.
“It’s an interesting snapshot of the performance of the NSW economy in the eyes of business owners just a year out from the next State election.
“The capital spending index rose to a record high 11.2 points, jumping 5.5 points from the September quarter with the construction and manufacturing industries recording the highest capital spending.
“The staffing index remained above trend with respondents in the food services, accommodation, manufacturing and finance sectors recording the largest increase in staffing levels.
“However in the long term, gains in capital investment and staffing could be lost as rising cost pressures continue to weigh heavily on businesses.
“The problem is particularly concerning in the accommodation, food service and manufacturing sectors where businesses report their costs are at record high levels.
“Governments need to recognise the impact high energy prices are having on businesses, and the long term implications on the state’s economic performance. In the short term Governments should be implementing a package of measures to increase supply and ease cost pressures,” said Mr Cartwright.