The crippling drought impacting most of NSW has seen business confidence dip, according to the latest Business Conditions Survey released by the state’s peak business organisation, the NSW Business Chamber.
Results show that September’s tougher trading conditions are a flow on effect from the 84 per cent of businesses who reported being impacted by the drought in August.
Compounding the state’s sluggish quarter are higher operating costs and a downward trend in revenue.
New England North West and Central West saw the sharpest deterioration in business confidence for the state. However, things haven’t slowed for Newcastle and Lower Hunter as they remain New South Wales’ strongest performers.
While failing to buffer some of the weaker results in retail, trade, rental, hiring and real estate, Sydney appears to be remaining strong in key areas such as profitability and staffing.
“Ahead of a briefing with the Governor of the Reserve Bank later today, we will be highlighting key economic issues and observations in NSW including the impact of the drought on businesses across the State,” said NSW Business Chamber Chief Executive Stephen Cartwright.
“While NSW remains number one, with 151,000 new jobs created within the past year and the lowest unemployment rate in Australia, we are seeing the impacts of the drought hit business,” Mr Cartwright said.
“Lower levels of capital spending this quarter show businesses are tightening their belts and delaying major spending decisions.
“Higher operating costs have continued to plague business at a time where 4 in 5 businesses are seeing cash flow dry up, and they are having to spend what cash they do have on overpriced operating bills like energy.
“We need to see a stronger commitment for affordable energy, drought-focused support services that assist businesses - like ATO payment plans to assist tax obligations in drought stricken areas - and a renewed focus on delivering skills training for our young people.
“From a State Government standpoint, focus needs to remain on delivering the infrastructure spending (especially in rural and regional NSW) to make sure that our economy goes from strength-to-strength. While many members of our business community are being rocked by factors beyond their control, the Government has the ability to stimulate an even stronger economy,” Mr Cartwright said.
Click here to view the latest Business Conditions Survey.