MEDIA RELEASE
AARON MOREY
CCIWA CHIEF ECONOMIST
Confidence dims among regional businesses – CCIWA Regional Pulse
Confidence has faded among WA’s regional businesses, with CCIWA’s latest Regional Pulse report showing higher costs have swept aside signs of steadier business confidence in April.
The proportion of businesses with a confident outlook for the next three months fell by 14 percentage points, while those expecting weaker conditions rose 16 points. Short-term sentiment in the regions has fallen 9 points behind sentiment in the city.
The Pilbara stands alone as WA’s most upbeat region, where more than three in every five (64%) businesses maintain a strong long-term outlook. By comparison, concerns were most widely held among businesses in the Wheatbelt (58%) and South West (57%) regions, where dry weather and weaker tourism added to nerves.
Rising operating costs remain the leading worry for WA’s regional businesses, impacting one in every four (80%) respondents. This is especially the case in the Goldfields-Esperance (89%), Wheatbelt (89%) and Pilbara (82%) regions. Soaring costs have eroded the profit margins of one in every two regional businesses (53%).
One third (31%) of regional businesses increased their debt levels over the past three months, up 7 points and having roughly doubled in the past two years.
At the same time skills shortages continue to impede seven in ten regional businesses (72%), and expectations of higher labour costs have risen by 9 points.
The key challenges of the past two years – skills shortages, supply chain disruptions and COVID – have been overtaken by punishing operating costs, which are wearing down regional businesses. State Government could provide relief to regional businesses by easing WA’s uncompetitive payroll tax burden.