Australia’s business confidence has suffered after a difficult Christmas period, according to the December quarter 2014 ACCI Survey of Investor Confidence.
The survey revealed an overall negative state of affairs, with respondents highlighting a drop in business conditions after a slight improvement in 2014.
Business profitability has dropped to the lowest point in the 23 years the survey has been conducted, while business conditions in December were found to be lower than the five and ten-year average.
“Business owners are feeling pretty grim at the moment after a fairly bleak Christmas period. We saw a glimmer of hope in the middle of the year with a slight upturn in conditions, but that has now been reversed,” ACCI CEO Kate Carnell said.
“The figures on profitability are the worst we’ve seen in the 23-year history of the survey. Insufficient demand is the main constraint on investment for the second quarter in a row which confirms that businesses are struggling.”
While the lack of non-wage labour costs, taxes and charges, local and overseas competition, and demand were found to be the five biggest constraints, the number of businesses expecting more full-time employees is at its highest since 2011’s March quarter.
“We need the government, and the Parliament to act to restore business confidence by fixing the budget and undertaking productivity-enhancing structural reforms,” Ms Carnell said. “We also call on the RBA to put rate cuts back on the table.”
Regardless of the survey’s findings, Treasurer Joe Hockey is confident 2015 will be a good year for Australian business.
“It’s going to be a great year for Australia, it’s going to be a positive year for the economy,” Mr Hockey told 3AW, a point he reiterated later in the segment.
“I am more positive about Australia than I have ever been. We are in a great position at the moment.”