Over the last two years, there’s been a lot of talk in the WA business community about the need for growth, yet the undertone has been one of survival.
‘Cautious optimism’ is the new catchcry, as WA businesses appear to be rebalancing their focus from internally driven concerns around cash flow management and customer retention to more externally focused objectives around new customer acquisition and engagement.
The traditional concerns haven’t gone away, but there are a range of indicators to suggest the economy might just have turned the corner.
The WA Chamber of Commerce and Industry’s biannual review of the state predicts local economic growth this year, after the economy shrunk 2.7% last financial year – the first contraction since the 1990-91 recession.
The CCI predicts the economy will expand 0.9% this financial year before growing 3.3% the following year.
Deloitte likewise expects that growth will be slow and steady in 2018, with Gross State Product (GSP) – a measure of total economic output – predicted to rise by 1.7% this year, followed by growth of 2.3% in 2019 and 3% in 2020.
This forecast comes on the back of a rise in State Final Demand in the first quarter of 2017-18, as well as an improvement in official labour force data, expectations for business investment in 2018, exports and housing.
The latest data from the Australian Bureau of Statistics showed unemployment at 5.7% in WA in December, down from 6.6% in November.
This narrative of growth and recovery is supported by a new report compiled by CoreData for Bankwest, which showed WA businesses are mildly optimistic about the future post the end of the construction phase of the resources boom.
The Bankwest Future of Business Report 2018, which canvassed the views of 259 business owners, leaders and managers in Western Australia, found many respondents share a degree of optimism towards WA’s economy, with close to two in five (39.0%) saying their outlook is at least somewhat positive in the next 12 months. Only one in five (22.1%) share a negative outlook.
According to the survey, the uptick in sentiment is largely due to improved expectations for the mining sector in the next 12 months.
Indeed, mineral exploration is growing again, with lithium and LNG tipped to buoy WA’s mining and resources sector this year.
However there remains some polarisation in the longer-term outlook held by business leaders; while more than half (51.1%) agree or strongly agree that the future looks bright for WA businesses in the next five years, close to half (48.9%) do not.
This shift in sentiment is causing a renewed focus on growth – with close to four in five (79.2%) leaders at least somewhat focused on growing their business in the next 12 months. Three quarters of them are concentrating their efforts locally within WA.
Businesses aiming to grow are rightly focused on customer satisfaction and referrals and targeting new types of customers – but also acknowledge that local economic conditions are both a growth enabler and potential barrier.
In times of uncertainty, when cost-cutting is top of mind, it’s easy to let an internal focus take precedence over your go-to-market strategy.
But growth-focused businesses are putting the customer at the heart of what they do, and they are likely to reap the benefits.
Download the Bankwest Future of Business Report 2018 here: http://bit.ly/2Fvwten
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