Small business confidence buoyant in regional Queensland
Regional Queensland may have been doing it tough, but small businesses are more enthusiastic about the next 12 months than their city cousins.
The exclusive Suncorp CCIQ Pulse Survey of Business Conditions for the June Quarter shows regional businesses have a higher level of optimism in the 12-month outlook for the Queensland economy.
CCIQ senior policy advisor Kate Whittle said the survey of 600 businesses statewide indicates that optimism is 2.4 percentage points higher in regional areas in seasonally adjusted terms.
“That is very encouraging, considering the challenging environment,” she said.
“The mining downturn, youth unemployment … all have combined and had some impact on small businesses in regional Queensland. But they definitely see positive signs ahead.”
Ms Whittle said the Pulse Survey showed current measures of business performance in regional areas were still quite weak.
“Businesses operating outside of South East Queensland recorded an index level of 37.6 for general business conditions and an equally low figure of 36.4 for business profitability,” she said.
“An index score of less than 50 is an indication of weakening business sentiment, with the June Quarter scores of regional business highlighting the challenges currently being experienced.
“The September Quarter forecast indicates that regional businesses believe that sales and revenue will improve in the next three months.
“Business activity in the tourism and agricultural sectors have been cited as key elements that will drive business across that period.”
The Pulse Survey had revealed that business confidence in SEQ had slowed as the economy failed to fire following “business-friendly” State and Federal Budgets and in the aftermath of the Federal Election.
That was being blamed on flat sales, rising operational costs and eroded profitability for many businesses, which presented challenges to increase employment and investment.
However, the survey forecast improved customer spending and a better bottom line for businesses in the second half of 2016, with the low Australian dollar and interest rates benefitting many sectors.
“This is providing some confidence that sales and customer spending will strengthen in Queensland across the next quarter,” Ms Whittle said.
Suncorp Group Economist Steven Milch said it was pleasing to see regional Queensland businesses were likely to be more confident in the next quarter.
“We appreciate the June quarter provided an unsettling environment for small business, but there are certainly opportunities ahead,” Mr Milch said.
“The outlook for the agricultural sector has improved, commodity prices have lifted and tourism is benefiting from the low Australian dollar. Each of these are key sectors for the Queensland economy.
“We remain committed to working with organisations like CCIQ to help support the strength and sustainability of the business sector.”
The survey was conducted from July 11-24