After a tough, confidence-sapping year, business is taking a more positive outlook to 2014, according to a Business News subscriber survey.
After a tough, confidence-sapping year, business is taking a more positive outlook to 2014, according to a Business News subscriber survey.
The survey results show 64 per cent of respondents think business conditions will improve in the New Year, compared with 27 per cent who believe there will be no change and 9 per cent who expect things will worsen.
The results are even more positive than the the latest Westpac – CCI Survey of Business Expectations, out today.
It found that after falling to GFC-low levels in September, confidence among WA business has rebounded in the final few months of 2013.
The Business News survey of 3,144 readers, conducted last week, indicates a greater degree of optimism than National Australia Bank’s November business survey, which showed business confidence had ‘edged back’ in response to the change in political power, and favourable asset prices.
The NAB survey found business conditions were steadily improving, although still weak, with largest improvements in the manufacturing and mining sectors.
In contrast, Roy Morgan Research released a survey on December 9, depicting a decline in business confidence for November, particularly in WA and SA.
Roy Morgan said the drop in confidence could be attributed to the bad news linked to car manufacturing, the rift with Indonesia and to the budget outlook, including the need to lift the debt ceiling.
The Westpac CCI survey found that a quarter of local businesses expect economic conditions to improve in 2014, up from eight per cent in September.
However, many are still cautious about the economic outlook, with a third expecting conditions to deteriorate.
“This lift in confidence has occurred as firms reported some relief from the key challenges that have plagued their business in recent years, however, the operating environment still remains challenging,” CCI chief economist John Nicolaou said.
According to the survey results, business found it easier to source staff this quarter with less than 13 per cent reporting labour to be ‘scarce’ and more than 15 per cent finding labour to be ‘abundant’.
The survey also found the cost of doing business in WA has moderated slightly but still remains at a high level.
With cost pressures easing, 16 per cent of businesses reported their bottom line had improved in December, up from eight per cent in September.
The more positive outlook for 2014 means more WA firms are looking to employ more staff and increase their capital spending.
Around a quarter of business plan to hire more workers in the first quarter of next year and around 18 per cent are looking to spend more on plant and equipment.
With recruitment back on the agenda, wage costs are top of mind for business in 2014. The feature question this quarter asked businesses about the key issues facing their business in the year ahead.
“In a sign that the cost of doing business in WA is still putting pressure on local firms, wages have topped the list of concerns for business for the fourth year in a row. Businesses are also still worried about conditions in the global and local economies and how this could effect the operating environment,” Mr Nicolaou said.
