Central Coast businesses have lingering concerns about cash strapped customers, insurance and energy costs according to the latest business conditions survey from Business NSW.
“Business confidence levels for local business in the first quarter of 2024 dropped 4.6 points to -70.6,” Business NSW Regional Director Central Coast Scott Goold said.
“However businesses are reporting a dramatic jump in confidence to -29.4 for quarter two suggesting the pause in interest rates and an increase in retail trade will improve business performance.
“Across NSW, the latest Business Conditions Survey – the most comprehensive business temperature check in the most important state – reveals the pause in interest rate rises has helped lift the Business Confidence Index for the third straight quarter to -52.9.
“The disparity between the statewide confidence level and that of the Central Coast is due to a greater increased wage expectation and more significant cashflow disruptions across the region,” Goold said.
“While the quarter one result is concerning, the improved outlook for quarter two shows how the diversity of industry across the Central Coast helps to contribute to quick rebounds when things get tough.
“Interest rates holding is also playing a big role in recovery.
“With every interest rate rise, businesses experience an almost immediate reduction in customers walking through the door.
“This forecast increase in business confidence is a positive sign.”
When it comes to their customers, 95 per cent of businesses are experiencing some impact of the rising cost of living.
“The most common experience is reduced customer demand for their products and services,” Goold said.
“A majority of businesses have observed consumer behavioural changes in the form of reduced frequency of purchases, reduced quantity per order, increased appetite for lower cost substitutes and increased price negotiation.”
Insurance is again top of the list of cost concerns for businesses, while taxes/levies are second and energy costs third.
More than half of NSW small to medium business experienced supply chain issues in the past three months, reflecting the devastating impact of industrial action at the nation’s ports.
“Our members remain concerned about the new industrial relations laws which threaten to put a serious dampener on the NSW economy in the coming months and years,” Goold said.
“It remains vitally important that our state and federal governments make the cost of doing business the number one, two and three issues on their agenda.
“To improve the ease of doing business, survey respondents consider taxes, levies and government charges as the area that requires top priority attention from government.”
The survey also revealed: more than half (54 per cent) of Central Coast businesses have reported business supply chain disruptions in the past three months; six per cent of Central Coast businesses observed more job applicants as a result of cost-of-living pressures; 92 per cent of businesses have identified issues related to attracting and retaining skilled workers in their region; and 20 per cent of businesses are planning to hire additional staff in the next three months, while 24 per cent are planning to cut staff.