Western Australia’s chief executives are the most confident in the country, according to the latest survey by The Executive Connection.
Western Australia’s chief executives are the most confident in the country, according to the latest survey by The Executive Connection.
The survey, completed by 300 chief executives early this month, also found that business sentiment nationally has improved after dipping in the June quarter.
The TEC survey follows the latest CCI BankWest survey of business expectations, which found that the booming resources sector has continued to drive business confidence in WA.
Nearly 90 per cent of respondents to the CCI BankWest survey believe economic conditions will either continue at their current level or improve during the next 12 months.
The proportion of respondents reporting favourable trading conditions remained well above the medium-term average, while capital spending plans remained close to their historical high.
The CCI BankWest survey found a decline in the number of firms hiring staff, after hitting a record in March. However, the number of businesses taking on staff was still twice as high as the number cutting staff.
The shortage of skilled labour was reflected in the survey results, with a majority of firms of all sizes and from all industry sectors reporting shortages.
Nearly 63 per cent of respondents said labour was scarce, up slightly from the previous quarter and well above the result 12 months earlier (44 per cent).
BankWest economist Alan Langford cautioned that higher costs are offsetting higher activity to some extent. In particular, the survey found that labour and material costs are rising faster than prices charged, which would squeeze profit margins.
Large businesses faced higher cost pressures but were also more likely to increase their selling prices.
Meanwhile, the TEC survey found that just over half of chief executives nationally plan to hire extra staff in the next year, up by 16 per cent on the previous quarter.
Nationally, 31 per cent of chief executives expect economic conditions to worsen, while 11 per cent foresee better conditions.
In WA, optimism is much higher, with 43 per cent of chief executives seeing future economic improve-ments and 80 per cent anticipating higher profits.
