Business Confidence Returning

The underlying confidence in the region as noted in our previous quarterly survey has started to emerge with an upturn in Townsville’s Business Confidence. The PVW Partners’ September 2024 quarterly Business Confidence Survey had an increase of 2.0 resulting in an index of 3.6.

Sonia Chalk, Partner at PVW Partners Accounting and Advisory firm said, “There was a decrease in our previous quarter of 3.9 however underlying forward looking indicators in that quarter indicated that the decline may have been a short term drop.  This has proven to be true with this quarters increase.  Whilst not back to the high of the March 2024 quarter, the index is double that of the comparative September 2023 quarter”. 

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. 

Sonia Chalk observed “this quarter’s increase is largely on the back of increased confidence in the areas of sales and people.  Whilst overall sales expectation remains steady, over 84% expected an increase in consumer demand.  This is an uplift of 11% on the previous quarter.  This expectation may be on the back on the implementation of stage 3 tax cuts that will come into effect on 1 July 2024 providing households with some increased disposable income.  Similar to sales and consumer demand, in respect of people, whilst training remained steady, 94% of businesses expected to maintain or increase employment levels”.

Sonia Chalk went onto comment “The forward looking indicators such as capital expenditure, advertising and entertainment have all remained relatively stable with less than a 2% movement in their indicator from the previous quarter.  This is despite a lack of funding announced in the Federal Budget for our region. Travel however took a small decrease in its overall index with 5% more businesses expecting their travel costs to decrease.

In addition to the above, at the time of writing last quarters index, the Federal and Local elections were in play.  Whilst the Federal strategies are now known, there is some unrest within the Townsville regional economy which may have had an impact resulting in cautious levels of capital expenditure and advertising predicted within our region”.

In respect of additional questions posed in this quarters survey around the governments expectation on inflation and impediments to growth, Sonia Chalk stated “It is clear there is mixed sentiment around government inflationary predictions with nearly a 50/50 split between those believing the 2.75% projected inflation rate was likely versus not likely.  Since the survey was taken the May inflation result has come in at 4.4%. Clearly this is an unfavourable result and may impact the RBA interest rate decisions in coming months.  In terms of our regions impediment to growth, the biggest impediment noted with a 41% response was the availability of appropriately skilled workers in the local labour market.  A fact that that is not isolated to our region but appears to be far reaching across our country.  Other impediments noted but at much lower impacts were the increased costs of expansion at 12% and the availability of suitable financing options at 10%.”

Sonia Chalk concluded “it is pleasing to see an uplift in the region’s confidence despite uncertain sentiments around government predictions and local mayoral conditions and although the largest impediment to growth was highlighted to be around the labour market, businesses continue to have a focus on maintaining and increasing their employment levels, however inflation will remain a major issue for mortgage holders.”.