Business Confidence Flying High

Business confidence continues to gain momentum in Townsville with the PVW Partners quarterly Business Confidence Survey for the June 2022 quarter showing an increase of 3.6 points to 13.4.

Carl Valentine, PVW Partners Managing Partner said, “The June 2022 quarter result is the highest we’ve seen business confidence in Townsville in 15 years and is the 2^nd highest result in the 30-year history of our survey (this highest result being recorded in June 2007)”.

Commencing in September 1991, PVW Partners Townsville Business Confidence Survey has now been running for over 30 years and is a unique measure of the levels of confidence of Townsville’s business community. The June 2022 quarter survey was conducted in early March 2022 and hence preceded the handing down of the Federal Budget (to be handed down on 29 March 2022) and significant local announcements, like the funding for the Hells Gates Dam.

“In some cycles, the spectre of a Federal Election can create uncertainty and dampen confidence, however that would not appear to be the case at this point in time. Our local businesses have a full head of steam and are making the most of the best economic conditions we’ve seen in recent times”.

“The current levels of business confidence aren’t just a flash in the pan. While the index is currently at a particularly high level, the average level of confidence in the past 5 years was 6.1 – the 5 years prior to that saw an average of only 0.1. Putting this in context, the best 5-year average confidence level was recorded up to June 2007 with a score of 8.0”.

“We expect to see confidence to continue at higher levels for at least the next couple of quarters, notwithstanding some headwinds against business in the form of cost pressures, increasing resource scarcity, likely increases in interest rates and higher levels of competition for skilled and experienced employees. Helping businesses navigate those headwinds are expectations of sales growth, a clearer pipeline of future work opportunities and perhaps a sense that the business impacts of COVID-19 are diminishing”.

This survey also asked Townsville’s business owners and managers to share their expectations on the upcoming Federal Budget.

“Given the current low levels of unemployment it was not surprising that expectations for wages subsidies to support jobs growth were muted, however we would expect that as wage bills grow in line with inflationary pressures, any government support to reduce wage costs would likely be welcomed by business, especially when so many other business inputs are becoming increasingly costly”.

“While many of us would like to see reduced personal tax rates, less than 25% of the respondents expect personal tax relief to be part of this year’s Federal Budget. There was more confidence that business tax incentives would continue to be a feature of Federal Government policies with over half of the respondents expecting business tax incentives to be maintained at current levels or potentially increased”.

“Our business community also has clear expectations around where they would like to see the Federal Government concentrate its expenditure in our region. Over 70% of the respondents saw regional infrastructure spending as the highest priority in the upcoming Federal Budget with spending on families and welfare being seen as a more moderate priority. Somewhat surprisingly, spending on defence related initiatives in our region was seen as a lower priority against infrastructure, job creations and families and welfare”.

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