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Why is the nation’s best-performing economy dragging behind in business confidence?
30 April 2024 | Minutes to read: 2

Why is the nation’s best-performing economy dragging behind in business confidence?

By Jamie McKeough

It should be welcome news to all South Australians that our economy has topped the leaderboard for the second consecutive time in the latest CommSec State of the State report. However, amidst a climate of barely growing business confidence, rising costs, and declining profits, businesses can’t be faulted for wondering why they should be celebrating.

The report ranks on eight indicators, and South Australia has topped the list on four of them, including real economic growth, the jobs market, construction work done, and dwelling starts. While these are positive macro indicators, they fail to consider the micro issues faced by business – costs, profitability and labour availability..

From the results of the March quarter survey of business expectations, it’s clear that businesses in South Australia, both big and small face challenges. Concerns about costs, profitability, staffing, skills, and government policies are on the rise. Despite these challenges, we are still touted as the nation’s best-performing economy.

According to the South Australian Business Chamber and William Buck Survey of Business Expectations, only 15% of South Australian businesses recorded an increase in profit in the last quarter.

Part of this is the fact that during difficult economic times, businesses are reluctant to increase prices, fearing a loss of customers. However, I continue to encourage businesses, if possible, to consider a price increase strategy. Even a modest increase could offset rising costs and maintain profitability.

Now more than ever, businesses communicating their difficulties is crucial. Organisations like the Chamber play a vital role in sharing the reality of business conditions with the government.

William Buck is proud to support the Chamber’s efforts in collecting vital information needed to address the specific needs and challenges faced by our state’s businesses and advocate governments accordingly.

Since 2018, William Buck has been actively involved in supporting these efforts and remains committed to keeping a finger on the pulse of South Australian businesses. The quarterly survey provides a platform for businesses to raise key issues affecting their ability to trade, particularly when the sector is dissatisfied with current conditions. When the business sector is not happy it comes through loud and clear in the survey.

Issues such as land tax reforms in 2019 and prolonged Covid restrictions in early 2022 have been significant challenges for businesses, underscoring the importance of government responsiveness.

Failure to address these concerns can have political consequences, as seen with the former state government.

Despite fluctuations in confidence levels, the underlying strength and resilience of our state’s business sector remain consistent. This resilience is evident in each survey and reflects the daily interactions we have with our business clients at William Buck.There are so many fantastic businesses in South Australia – we all need to nurture and protect this important sector.

As I conclude my tenure as Managing Director of William Buck SA and pass the reins over to Adrian Chugg, I make the above observations on the past six years of analyzing and commenting on survey results. I am confident that our incoming Managing Director will continue this important work with dedication and insight.

To read the full report, please click here.

Why is the nation’s best-performing economy dragging behind in business confidence?

Jamie McKeough

Jamie is the Managing Director in South Australia and Chair of the William Buck Board of Directors. Jamie provides business and financial management, tax and accounting advice to clients across many different industries. His key strengths are in problem solving and understanding business models and the key drivers of business.

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