Business confidence in Newcastle and the Hunter region remains high despite businesses across most of the state reporting tougher trading conditions towards the end of 2018, according to the latest quarterly survey by the NSW Business Chamber.
Energy costs, the impact of the drought and the uncertainty over the NSW and Federal elections have contributed to subdued confidence felt by business owners. However, quarterly results in Newcastle and Lake Macquarie went against the state-wide trend, with a high business confidence rating of 22.5 compared with the NSW figure of -3.1.
That trend was also reflected in the annual results, with both the Newcastle and Lake Macquarie and Hunter statistical regions recording high business confidence compared with the rest of NSW across the four quarters of 2018.
Hunter Business Chamber CEO, Bob Hawes said the results likely reflected high activity in construction in Newcastle and Lake Macquarie and the strength of the mining sector, among other factors.
“We recorded very positive results from respondents in Newcastle and Lake Macquarie on key indicators such as capital spending, sales revenue and new staff numbers over the December quarter,” Bob said.
“However, many businesses continue to grapple with increased operating costs, and energy pricing is a particular pain point.”
Bob said respondents state-wide had low expectations for the March quarter, with the NSW economy facing headwinds from international markets, volatility in the housing sector and rising operating costs.
“While the NSW economy is leading the nation, the challenge for the next government of NSW is to keep the state moving forward,” Bob said.
“Put simply, there will be less money for schools, hospitals and roads if businesses across NSW stop investing and employing new staff.”
Across the state, sales revenue continued to fall, with the expected pre-Christmas sales boost failing to materialise. This had a flow-on effect for the profits index, which also fell.
“The brighter news is that business reported an increase in levels of capital spending compared to the previous quarter, showing they are not afraid to invest in their business,” Bob said.
“With the state election now less than two months away, it is vital that those parties looking to form the next government understand the true nature of current business conditions and just how important it is to have policies that assist business to invest and create new jobs.
“That is why the Hunter and NSW Business Chambers are campaigning on a platform of Keeping NSW Number 1, because although the economy is the envy of other states, we need to keep it running at full capacity.”
IMAGE | Business confidence in the Hunter region remains high.
