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Drought Dents Business Confidence But Newcastle A Bright Spot

Release Date: 3/10/2018
The crippling drought impacting most of NSW has seen business confidence dip, according to the latest Business Conditions Survey released by the state’s peak business organisation, the NSW Business Chamber.
Results show that September’s tougher trading conditions are a flow on effect from the 84 per cent of businesses who reported being impacted by the drought in August.
Compounding the state’s sluggish quarter are higher operating costs and a downward trend in revenue.
The survey, which includes responses from businesses across the Hunter Region, noted New England North West and Central West saw the sharpest deterioration in business confidence for the state.
“While NSW remains number one, with 151,000 new jobs created within the past year and the lowest unemployment rate in Australia, we are seeing the impacts of the drought hit business,” said NSW Business Chamber Chief Executive Stephen Cartwright.
“Addressing the impacts of the drought remains a key focus of the NSW Business Chamber and we continue to champion a range of issues with government in order to mitigate the impacts as businesses struggle with cash flow and keeping skilled people,” Mr Cartwright said.
Businesses in Newcastle and Lake Macquarie that responded to the survey partly bucked the trend and indicated local conditions were still strong.
“This is consistent with the level of activity occurring in the Lower Hunter. However, businesses elsewhere in the region will be feeling the impact of the drought,” said Hunter Business Chamber CEO, Bob Hawes.
“We’re fortunate in the Hunter region that our economic diversity is helping to offset the scale of impacts being experienced in nearby regions such as New England and the Central West,” Mr Hawes added
“We shouldn’t think we are insulated from impact noting the lower levels of capital spending this quarter show businesses across the state are tightening their belts and delaying major spending decisions.
“Higher operating costs continue to be a concern and we are again seeing energy costs rearing its ugly head and constraining business from investing and expanding.
“From a State Government standpoint, focus needs to remain on delivering the infrastructure spending (especially in rural and regional NSW) to make sure that our economy goes from strength-to-strength,” Mr Hawes concluded.

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