Townsville Business Confidence Declines

The PVW Partners Quarterly Townsville Business Confidence Index has weakened in the March 2019 quarter, but remains in positive territory, seeing the new year start with slightly lower levels of confidence than seen in 2018.

Managing Partner Carl Valentine said the overall confidence of the Townsville business participants shifted downwards by almost one and a half index points with the confidence of smaller businesses preventing a larger drop.

“Interestingly, for the first time since June 2017 there’s been a reversal in confidence between the bigger and smaller businesses across the region, with smaller operators responding more positively than their large business counterparts. This quarter’s result was also the lowest level of confidence in bigger businesses since March 2016.

“37 per cent of respondents with a turnover of less than $10 million believe sales will increase, while only 13 per cent of those businesses with a turnover of more than $10 million indicated a potential increase in sales,” Mr Valentine said.

“27 per cent of those larger businesses also expect employment levels to drop within their operations, while around 20 per cent of businesses with a turnover of less than $10 million expect a reduction in staff. Fewer new employment opportunities are expected to be created with only 15% of respondents reporting that they would be looking to increase the size of their teams.

“Despite local conditions appearing to improve slightly, larger businesses within our economy (including those in the building / construction and financial services sector with a concentration of them being part of national groups), are undoubtedly influencing business confidence across the city and impacting employment outcomes.

“As corporate Australia gets increasingly nervous, particularly around our capital cities, regional centres like Townsville are feeling the ripples. We don’t necessarily feel that the overall outcome is truly reflective of local business conditions with some of the outcome driven by national policies being implemented in response to changing business conditions in other parts of Australia.

“It is also possible that the outcome is reflective of business owners and managers starting to anticipate the outcome of the Banking Royal Commission and the Federal Election (expected to be held in May 2019).”

The respondents to the March 2019 Quarterly Townsville Business Confidence Index overwhelmingly believe the start of the Adani Carmichael Mine Project will be critical to Townsville’s economic recovery.

“More than 86 per cent of respondents said the project was either important or extremely important to the economic recovery of the region, while 11 per cent of respondents didn’t believe the project would have an impact,” Mr Valentine aid.

Overall, the results indicate sustained but softening levels of confidence with some headwinds anticipated by the business community in this quarter.

[ENDS]

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