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Weak spending unnerves NT business

June 30, 2011

Weak consumer spending has caused a slide in Northern Territory business confidence, according to the Sensis® Business Index released today.

 Report author Ms Christena Singh said the Northern Territory small business confidence indicator had fallen sharply during the quarter, but it remained above the national average.

 “While business confidence in the Northern Territory remains above the national average it is well below last year’s levels,” Ms Singh said.

 The report shows Northern Territory small businesses have experienced a weak quarter of trading coming out of the recent wet season, recording the nation’s lowest sales result, and the lowest sales result in the Northern Territory since May 2002.

 Conditions are expected to be weaker for the next quarter, although Northern Territory small businesses had higher expectations than all other states and territories for sales, wages and profitability.

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

 Thirty-five per cent of Northern Territory small businesses said they did not understand the proposed carbon tax, while 55 per cent said they partially understood. Ten per cent said they had a thorough understanding.

 Thirty-nine per cent of Northern Territory small businesses said a carbon tax would have a negative impact on their business (the lowest level in the nation). Twelve per cent believe it would have a positive impact, while 49 per cent believe it will have no impact.

 According to the findings, Northern Territory small businesses are most concerned about a carbon tax impacting on costs, with lower consumer demand and a negative impact on the economy also key concerns.

 For those Northern Territory businesses that felt the carbon tax would have a negative impact on their business, nine per cent said they would consider decreasing staff, with eight per cent looking at closing or selling their business.

 Small business support for the Northern Territory Government rose strongly during the quarter.

 Key Northern Territory findings from the June 2011 Sensis® Business Index:

·         Business confidence fell from 55 per cent to 33 per cent (28 per cent nationally)

·         Profitability fell from negative nine per cent to negative 20 per cent (negative 14 per cent nationally)

·         The sales indicator fell, down 11 percentage points to negative 24 per cent (negative 14 per cent nationally)

·         Overall employment by Northern Territory small businesses improved during the quarter, taking the indicator from negative six per cent to positive one per cent (one per cent nationally)

·         Support for the Northern Territory Government rose from three per cent to 14 per cent.