The confidence business leaders felt after the federal election seems to be fading away, as a new report shows bosses are losing faith that growth will pick up.
A business leaders confidence index survey carried out by The Executive Connection shows a decline in expected economic growth, current perceptions of economic performance and overall business confidence over the past three months.
“After a period of cautious optimism, CEOs are looking to economic indicators to direct business expenditure and investment,” TEC Chief Economic Advisor Warren Hogan said.
“Expectations for the economy are a critical element in business planning, and this quarter we’re starting to see signs of these concerns appearing.”
Although the hiring intentions of bosses surveyed remain stable in this last quarter, expectations for the year ahead have softened.
After a post-election bounce, the report shows businesses’ own indicators are tapering off, with anticipated profitability, prices and sales revenue all shifting down.
“The lack of confidence we’re witnessing is further being undermined by seemingly ineffective policy actions from the government and the RBA, uncertainty about the global economy and a persistently negative economic narrative,” said Mr Hogan.
When asked what kind of economical measures should be undertaken, 70 per cent of the surveyed CEOs thought infrastructure spending was most needed.
Company tax cuts and strategic industry policy were also supported by a 44 per cent of the participants, while 14 per cent backed an increase in Newstart.
“Considering there are elements affecting the economy that previously didn’t need to be accounted for, SME leaders should be conservative enough in their business plans,” the report concluded.
The Executive Connection provides mentoring and business coaching to CEOs and executives.