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Survey reveals tough conditions for business owners

Release Date: 15/07/2019
Business confidence has slumped in the Hunter over the June quarter according to the results of the latest Business Conditions Survey conducted by the state’s peak business organisation, the NSW Business Chamber.
The survey highlights tough business conditions across the state, signalling the need for additional stimulus to bolster economic activity, particularly in drought-affected areas of NSW.
While business confidence in both the ‘Newcastle and Lake Macquarie’ and ‘Hunter Valley’ statistical areas had bucked the statewide negative trend in the past two reports, Hunter Business Chamber CEO Bob Hawes said the region had “come back to the pack” in the latest survey.
The survey assesses business confidence by comparing the percentage of respondents reporting a stronger economy against those reporting weaker conditions. The change was most marked in Newcastle and Lake Macquarie, where business confidence has slipped from being “relatively strong” in December 2018 to “below average” in the July 2019 survey.
“The Hunter region had been performing above other regions of the state in recent surveys however it appears the negative sentiment is now having an impact in our region also,” Mr Hawes said.
“The fact that business confidence has deteriorated strengthens the case for governments, particularly the NSW Government, to get on with the delivery of infrastructure, especially infrastructure promised to regional NSW.”
Mr Hawes said regional business confidence had been propped up in previous surveys by a thriving construction sector, continuing strength in mining and flow-on benefits from major infrastructure projects such as the Newcastle CBD revitalisation and RAAF Base Williamtown upgrade.
“Some of these economic drivers are now trailing off, however there are factors on the horizon that may have a positive impact on business conditions,” Mr Hawes said.
“With State and Federal elections now out of the way, there is more certainty around policies that affect business, which should improve confidence.
“The recent passing of the federal tax package should also have a positive impact, as consumers will have more money in their pocket to spend on discretionary items.
“We also have continuation of government spending foreshadowed in the health and education sectors, and major projects such as the construction of Maitland Hospital will prove timely to support local activity.”
The survey shows that many businesses across the state have been doing it tough, however there are preliminary signs that businesses think tax cuts and interest rate reductions will provide a welcome boost.
“Businesses responded to the prospect of economic stimulus by recording a significant bounce in their perceptions of the performance of the economy going forward,” Mr Hawes said.
“While conditions remain weak overall, there are also signs that recent declines in staffing, capital investment, and sales revenue are bottoming out.”
Despite the downturn in business performance indicators and sentiment, unemployment remained relatively low at 4.6 per cent statewide over the survey period. Unemployment in Newcastle and Lake Macquarie was marginally higher at 4.7 per cent and the Hunter Valley recorded a rate of 5.4 per cent.

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