High energy prices, cybersecurity issues and rising interest rates have eroded confidence among Australian businesses, and even the upcoming Christmas period is not causing any excitement.
Business NSW’s new Business Conditions Survey revealed a level of pessimism on par with the pandemic and, before that, the global financial crisis.
The overall business confidence index (BCI) came in at -64.3, slightly less negative than the previous reading of -68.6.
However, for the first time since March 2020, the reading that reflects expectations for the next quarter dipped below the overall BCI.
In other words, no matter how bad business feels about it right now, they think it’s only going to get worse, even during the traditionally big holiday season.
“Beyond the pandemic, the last time we saw this happen was in 2009, in the wake of the GFC,” said Daniel Hunter, CEO of Business NSW.
“This survey serves as a wake-up call to all of us that businesses are struggling to emerge from the pandemic.”
The report also reveals that NSW corporations largely rejected the federal budget handed over in October.
On a scale of zero to ten, two-thirds of respondents rated the budget a score of four or lower in terms of support for NSW business.
The average grade was 3.1.
“There is a consensus that the latest Commonwealth budget is not doing enough to support business in NSW,” Hunter said.
“Business understands the need to build a stronger, more resilient economy and the need to address inflation.
“That’s why governments, state and federal, need to push ahead with skills and tax reforms, support during the energy transition, increased investment in innovation, and a coordinated state-federal productivity agenda.”
Businesses were also pessimistic about their cybersecurity preparedness following the hacks against Medicare and Optus.
Half of all respondents rated their cyber-attack preparedness as five or less out of 10. The average score was 5.4.
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