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Financial Indicators: Business Confidence
As of June 2008, business confidence in Townsville continued to remain in positive territory, indicating more optimism than pessimism in the business community regarding future economic prospects. Business confidence has, however, steadily declined each quarter over the past 12 months.
The latest results are indicative of a level of cautiousness creeping into business, largely as a consequence of the recent interest rate rises designed to reduce consumer activity. Business owners now have a lower expectation in the quarter ahead for employing people and are contemplating spending less money on training. Alternatively they plan to spend more on advertising as a measure to boost sales.
According to the PricewaterhouseCoopers survey, sales are expected to be slightly lower than the previous quarter with 20% of respondents expecting them to fall, and 43% of respondents believing sales will improve by more than 5%.
Demand for employment is down on previous quarters with 19% of respondents indicating they will increase employment levels and 73% expecting employment levels to remain unchanged. Growth in capital expenditure is expected to fall slightly, along with business travel. Overall 39% of respondents believe economic conditions will improve and 33% believe conditions will worsen, indicating a return to a more neutral position with respect to the future economic outlook.
Business confidence is expected to remain at its current level for the remainder of 2008, with population growth and resources providing respite for the local economy from global conditions.
Source:
PriewaterhouseCoopers
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