WA confidence languishes

BUSINESS confidence in WA for the medium term still languishes, according to a Chamber of Commerce and Industry survey.

Meanwhile, business confidence seems to be brimming elsewhere in Australia.

The quarterly CCI survey conducted in June found 45 per cent of respondents believe WA economic activity will deteriorate over the next year. Only 16 per cent expect an improvement.

The sector covering mining, construction and agriculture was most pessimistic, while the services sector was least gloomy.

This year’s March and June CCI surveys are the first since 1994 where WA businesses have showed less confidence than the rest of the nation.

Business concerns seem to have impacted on hiring. Employment growth for June was flat and survey participants reported fewer overtime hours and more labour available.

Wage pressures have eased except in the services and manufacturing sectors.

However, a trend is emerging for employers to hold current staff levels where possible rather than reduce employee numbers. Falls in employment seem to be concentrated in small and medium enterprises.

A higher number of businesses reported lower sales turnover and profitability during the last quarter.

The decline in turnover was reflective of the current downturn in the resources sector affecting mining and other production.

WA’s low inflation appears set to continue. Costs of materials and supplies do not seem to be rising as fast as a year ago and 70 per cent of survey respondents said they had made no changes to their prices.

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