NSW businesses are reporting a significant improvement in their performance, according to the latest Business Conditions Survey conducted by the state’s peak business organisation, the NSW Business Chamber.
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More than 900 businesses responded to the survey, with businesses reporting a lift in both sales revenue (their highest since March 2011) and profits (their highest since December 2011).
Despite this turnaround, there are still more businesses reporting falls in sales and profits than increases.
“Forty-five per cent of businesses reported hiring staff in the last three months, up from 43 per cent in March 2014,” NSW Business Chamber CEO Stephen Cartwright said in the report.
“Twenty-nine per cent reported they replaced staff that left, while 17 per cent hired new staff to increase capacity and meet demand.
“Levels of capital spending shot up dramatically this quarter in contrast to the sharp decline experienced in the previous quarter. There was also a substantial fall in operating costs this quarter, which will make it easier for members to do business.
“This quarter saw an increase in a number of business conditions, which goes against the traditional fall that businesses report in the autumn months. This shows encouraging signs for the rest of 2014 .
“Compared to the last few surveys, this last quarter was reported to be a good one for many rural and regional businesses, with the Hunter, Murray-Riverina, Central West Orana and New England North West reporting an increase in both the performance of the economy and profits.
“Coastal regions such as the Northern Rivers, Mid North Coast and Central Coast saw a decline in both.
“Many businesses reported that their major priority for 2014 was to keep their general operating costs down as well as reducing labour and utilities costs. Businesses reported that they are keen to reduce waste, increase their efficiency and productivity and increase sale for their products and services through better marketing.
“This survey was conducted prior to the repeal of the carbon tax, which was an unnecessary burden on many businesses.
“While skills shortages were at their lowest reported rate of 20 per cent this quarter, several regions of NSW continue to experience difficulty in attracting suitably qualified staff.
“In fact, over a third of Murray-Riverina businesses reported a skills shortage over the last three months, while the Mid North Coast reported 30 per cent and Central West reported 27 per cent.
"That should have the alarm bells ringing for both the federal and state governments.
“Sales and marketing skills continue to be highly sought, as well as customer service and administrative roles, and IT-related skills and knowledge.
“As the chamber continues to rollout our policy blueprint for the 2015 NSW election, Unfinished Business, it is important to stay focused on the key priorities such as asset swaps to fund better infrastructure, local government reform and a more competitive tax system which will all help business growth in the long term,” Mr Cartwright said.
www.nswbusinesschamber.com.au/NSWBC/media/Misc/Policy%20Documents/Surveys/Business-Conditions-Survey-June-2014.pdf