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Weak spending and economic outlook drag ACT business confidence down

June 05, 2012

ACT business confidence continues to fall because of weak consumer spending and concerns about the economic outlook, according to the June Sensis® Business Index released today.

Report author Ms Christena Singh said ACT small businesses experienced weaker trading conditions during the quarter and expected conditions to deteriorate further in the coming quarter.

“The sales, profitability, employment, capital expenditure and export indicators weakened during the quarter to levels well below the national average.

“The one piece of positive news coming out of the ACT this quarter is the overall rising value of exports, where the ACT outpaced all other states and territories,” Ms Singh explained.

Looking ahead, ACT small businesses are expecting a further weakening in sales and profits during the quarter and improvements in capital expenditure and employment.

The report shows the ACT business confidence indicator has dropped by more than half compared to 12 months ago, when it was the highest of any state or territory. Overall, five in 10 ACT businesses are currently confident about their business prospects for the next 12 months, while three in 10 are worried, bringing business confidence in the ACT to a level marginally below the national average.

Concerns about business decreasing and the economic outlook are the main reasons ACT small businesses are worried about their business prospects.

For those businesses that are confident, having an established and experienced business is the key reason ACT small businesses gave for their confidence.

Following the recent Council of Australian Governments (COAG) meeting, the June Sensis® Business Index also asked ACT small businesses for their opinions about regulatory reform.

As part of the survey, small businesses were able to indicate any area of Federal Government regulation they would like to see reformed.

“Overwhelmingly, taxation is the most common area ACT small businesses said they would like to see reformed, with workplace relations, GST and superannuation the next nominated areas for reform,” Ms Singh concluded.

 Key ACT indicators for June 2012 Sensis® Business Index:

 

Indicator

March 2012

June 2012

 

Business Confidence

+27%

+22%

Sales

-10%

-17%

Employment

+1%

-3%

Wages and Salaries

+8%

-1%

Prices

+6%

0%

Profitability

-7%

-19%

Capital expenditure

-8%

-14%

Proportion exporting

10%

8%

Export value

4%

29%

+ Export value = overall net % of exporting businesses that experienced
an increase/decrease in the value of exports during the quarter.

 

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