NSW business confidence drops amid decreasing sales and profitability
September 03, 2012
There has been a significant increase in negative sentiment, with a growing proportion of small and medium businesses saying they are concerned about their business prospects over the coming year. Those worried about their prospects were most likely to cite a
decrease in business as the main reason for concern, followed by people not spending.
Confidence among NSW businesses is now at its lowest point since March 2009. Businesses in regional NSW are substantially more positive than those in the Sydney metropolitan area.
During the quarter, more NSW businesses reported decreasing sales, reduction in the size of the workforce and increased wages, along with a significant drop in profitability and capital expenditure. Despite the drop in the past quarter, NSW had the equal highest performance in capital expenditure of any state or territory in the last quarter, along with the ACT.
Report author, Christena Singh, said that while NSW business confidence levels were marginally below the national average, it is important to note that more than 5 in 10 businesses had a positive outlook for the year ahead.
“Overall 53 per cent of NSW businesses say they are positive about prospects for their business over the next 12 months, with a further 37 per cent reporting a negative outlook,” she said.
“While there’s no doubt that some businesses are facing tough conditions, there are signs that business expects conditions to improve in NSW in the coming quarter.”
Businesses in NSW are expecting significant increases sales in the next quarter along with improved profitability, however they are expecting to increase their prices to achieve this.
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