Business confidence dips

BUSINESS confidence is plum-meting at a faster rate than in the lead up to the 1991 recession.

A new Dun and Bradstreet survey shows the number of business executives expectating increased sales had dropped to their lowest point since 1991.

Employment expectations also hit a five-year low, despite the recent strong jobs figures in WA.

Only a net 3 per cent of employers looked to hire staff in the next quarter with 18 per cent expecting to hire staff and 15 per cent looking to shed staff.

The survey also revealed a sharp drop in the number of executives who believed they would meet last Saturday’s first quarterly Business Activity Statement deadline.

The D&B National Business Expectations Survey for October found only 67 per cent of executives were completely confident of meeting the November BAS deadline, down from 83 per cent in September.

Perhaps of even more concern, the number of businesses that have set aside their GST revenue shrank from 88 per cent to 69 per cent during October meaning many businesses could find it very difficult to come up with the cash.

D&B managing director of Australia and New Zealand, Christine Christian said the survey reflected growing uncertainty about the immediate future for Australian business.

“The about-face in business optimism evident in September is now in free fall,” she said.

“Concerns over GST comp-liance, the weak $A dollar, interest rate uncertainly and the high cost of fuel have all taken their toll on confidence.

“This, together with the fact that all indicators now point toward a possible recession, means the outlook for small business in particular is far from rosy.”

Chamber of Commerce and Industry of WA chief economist Nicky Cusworth said part of the problem was that many people were spending no more than they had done prior to the tax cuts.

“Households have got more money to spend but they are not spending it,” Ms Cusworth said.

“The reason for that is that they are quite pessimistic and they don’t actually believe they are better off, so I think that there is an exaggerated perception of the impact the GST has had on consumer prices.”

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