Business confidence has seen its first dip in 12 months amidst interstate COVID risks, material shortages and lack of skilled labour in South Australia.

The Business SA – William Buck Quarterly Survey of Expectations for the June quarter has confirmed a 104.5 confidence index, falling 9.5 points from a 2 year high in the March quarter 2021.

Noting June quarter results reflect pre-Modbury cluster conditions, this survey was still influenced by the onset of restrictions, with preemptive measures during the nation-wide COVID scare emerging at the end of June.

Business conditions also fell from their highest level since before the Global Financial Crisis in the March quarter, which also saw the end of JobKeeper, with a 11.5 point decline to 105.3 points.

Business SA Chief Executive Martin Haese says: “It’s not surprising that we’ve seen a dip in conditions and confidence. During the March quarter, South Australia had a lot to be optimistic about with the success of Fringe festival, increased levels of trade in the CBD and coming off the back of a strong Christmas period.”

“I’m not discouraged about South Australia’s economic position as a result of this decline, I feel as though these numbers are possibly an example of a more stable economy, that will hopefully remain somewhat consistent as we see our way out of the pandemic”. Said Mr Haese.

The continual impact COVID-19 has on many businesses, particularly in the hospitality, events and tourism sectors has continued to provide sobering expectations, with 69.2 per cent of businesses expecting sales to be below 70 per cent of their pre COVID revenue in the September quarter.

Martin Haese expressed concern for those industries that continue to be the hardest hit by restrictions and lockdowns. “Something we can do right away, particularly to benefit the CBD, is return international students to South Australia, safely, and as a matter of priority.” Said Mr Haese. A statement reinforced by the wider business, with 82.9 per cent of businesses agreeing that they should return, should they be able to prove they have been vaccinated.

In the ‘Business Now’ report, South Australia’s longest running survey of its kind, many businesses continued to express frustration about the shortage of materials and skilled labour. June quarter results outlined that 57.7 per cent of businesses reliant on physical inputs found it difficult to source inputs, stock and/or materials. This was a 12.7 per cent increase from the March Quarter.

Jamie McKeough – Group Chairman of William Buck Accountants and Advisors, survey partner of ‘Business Now’ said: “Concerns over labour force availability and material shortages appears to be dampening the overall outlook among SMEs. These were significant issues facing business during the 2020/21 financial year.”

Businesses are unlikely to see much relief in these areas until a steady opening of international borders occurs, which is heavily reliant on a fast and effective vaccine rollout. Disappointment was expressed by the Business community with survey results outlining 58.1 per cent of businesses dissatisfied with the pace of the vaccine, however as supply levels of the Pfizer vaccine start to increase, we expect this sentiment to change.

Business SA Director of Policy and Advocacy, Andrew McKenna says: “Business stands ready to contribute in any way they can in ensuring a swift vaccine rollout. Until now, supply issues have held us back, but with those issues expected to subside in the coming month or so, governments need to be open to all options to ensure maximum coverage as quickly as possible, including workplace vaccinations”.

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