Business Confidence Levels Remain High

The PVW Partners quarterly Business Confidence Survey results have been released and Townsville businesses are still quite optimistic however there has been a dip in the index from 12 to 9 for this coming September 2021 quarter. This survey was conducted prior to the recent lockdown in Townsville.

Carl Valentine, PVW Partners Managing Partner said that while there has been a softening, levels of confidence remain above recent averages and well above the longer term average. Many of the composite measures of business confidence remain strong. Overall, there is still a significant feeling in the business community that Townsville is in an excellent position and the future is geared towards an upward economic trend for the region.   

“These results are extremely encouraging, and the majority of Townsville businesses seem to have shrugged off the end the JobKeeper program and continuing uncertainty around COVID and the related border closures, lockdowns and trading restrictions by demonstrating a very positive outlook about the future and actively investing in their people and business assets,” Mr. Valentine said.

“Continuing a strong trend in this calendar year, 96% of the respondents expected their sales or level of turnover to remain stable or increase, with similar results recorded for expectations around levels of customer demand for their products.

“Townsville has shown how resilient it is as a city and how we are in a strong position to “do the business”, as indicated by the number of significant evens being held in the city recently. This has given not only financial boost but also added a positive feeling to the business and general community.

“Our Business Confidence Survey also showed that 2/3rds of respondents expect their organisational employment levels will most likely remain the same but are now operating on average at around 78% of capacity. There remains capacity for our local businesses to grow, but labour shortages are likely to impede growth opportunities in some sectors.

“Although this survey was carried out before the recent June, July COVID lockdown in Townsville and South East Queensland there is much to remain confident about. The trajectory of Townsville economically is increasing, and business is supportive and optimistic of the many projects in the pipeline or coming to fruition.”

This survey also asked for Townsville’s business owners and managers to share their views on the recently announced $10B government guaranteed Cyclone and Related Flooding Reinsurance Pool to be in place from 1 July 2022. It is intended that the design and implementation of the reinsurance pool for cyclone and related flood damage across Australia will reduce the rising cost of insurance premiums associated with cyclone damage. The Federal Government has also announced that more than 500,000 residential, strata and small business property insurance policies in Northern Australia are expected to be eligible to be covered by the reinsurance pool.

Almost half of the respondents indicated that at this stage they did not have enough information to understand what impact the reinsurance pool will have on insurance premiums for their business with a further 30% expecting the pool to have no impact on their insurance premium. Only around 20% of respondents expect the pool to be effective in reducing premiums for their business. It would certainly appear to be the case that Townsville’s business owners and managers are seeking more information about this pool to help them understand the potentially positive impacts for their business.