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Economic uncertainty rocks WA business

June 30, 2011

An uncertain economic climate has caused a slide in Western Australian business confidence, according to the Sensis® Business Index released today.

 Report author Ms Christena Singh said the Western Australian small business confidence indicator had fallen during the quarter, but had not been hit as hard as many other states and territories.

 “Business confidence in Western Australia remains above the national average but below last year’s levels.

“The report shows Western Australian small businesses have experienced a weak quarter of trading and expect worse conditions over the coming quarter,” Ms Singh said.

 Given the topical nature of a proposed carbon tax in Australia, the Sensis® Business Index also asked Western Australian small businesses specifically about their views.

 Thirty-eight per cent of Western Australian small businesses said they did not understand the proposed carbon tax, while 52 per cent said they partially understood. Ten per cent said they had a thorough understanding.

 Fifty-four per cent of Western Australian small businesses said a carbon tax would have a negative impact on their business. Three per cent believe it would have a positive impact, while 43 per cent believe it would have no impact.

 According to the findings, Western Australian small businesses are most concerned about a carbon tax impacting on costs, with a negative impact on the economy and consumers having less money to spend also key reasons.

 For those Western Australian businesses that felt the carbon tax would have a negative impact on their business, 11 per cent said they would consider closing or selling their business, with six per cent looking at decreasing staff and six per cent considering modifying products and services.

 Key Western Australian findings from the June 2011 Sensis® Business Index:

·         Business confidence fell from 37 per cent to 29 per cent (28 per cent nationally)

·         Profitability fell from negative 16 per cent to negative 25 per cent (negative 14 per cent nationally)

·         The sales indicator fell, down two percentage points to negative 13 per cent (negative 14 per cent nationally)

·         Overall employment by Western Australian small businesses improved during the quarter, taking the indicator from negative four per cent to negative two per cent (one per cent nationally)

·         Support for the Western Australian Government rose from negative three per cent to positive two per cent.