The NSW Business Chamber recently completed its quarterly survey of business and a large cohort of Hunter based firms took part.
Hunter businesses are optimistic about the year ahead based on the positive result recorded in the survey.
The results of the Business Conditions Survey demonstrate sentiment is strong across the region and business confidence is high on the back of perceived strength in the state and regional economies.
In the last three months of 2017, 80 per cent of Hunter business surveyed experienced stable or a total increase in revenue.
Almost 75 per cent of respondents recorded stable or an increase in profit over the same period which is encouraging news.
Business confidence is being driven by the construction boom in parts of the region, the recovery in the mining sector after improved commodity prices, the activity around large-scale development projects, such as the investment going into RAAF base Williamtown, and continuing low interest rates.
Compared with other parts of the state, Hunter businesses are expecting stronger conditions across most economic indicators including growth in capital spending, sales revenue, profit and staff numbers. Almost 80 per cent of the businesses surveyed in the Hunter expect profits to remain steady or grow over the short term.
Of businesses surveyed, 59 per cent hired new staff between October and December with two thirds of these being for new rather than replacement positions. This is consistent with recent reports of employment trends and improvement across the region and pleasingly, the availability of suitably qualified staff is not seen as a significant barrier for business with ambitions to expand.
However, cost pressures remain a concern for business with inefficiency and unproductive work, record high-energy costs, and general operating costs the top three targets for business to reduce expenses.
It seems the energy cost and supply issues still weigh heavily on business with the item leaping from the fifth to the second most prevalent matter noted in the past year. We’re not seeing a response from government that satisfies business despite initiatives announced in late 2017.
The Hunter Business Chamber is conscious, however, that anecdotally, not all businesses are performing as well as they would like. Issues, for example, with traders in the Newcastle CBD among the revitalisation and private sector projects have been widely reported.
Drought conditions in parts of the Hunter have a flow-on effect on many businesses that support the rural sector. In an ironic twist, some businesses with immediate ambition to grow and take on staff are having trouble recruiting despite the apparent employment buffer we have, even though the unemployment rate is decreasing.
It’s incumbent that we do what the region has shown a capacity for in the past and that is to try to bring all members of the community and business sector along the same and hopefully positive journey. It is clear we will have a task ahead to maintain and spread the benefits of the current positive indicators.