Confidence slumps as business takes a triple hit

Chamber News
January 31, 2020

Business confidence in the Hunter and statewide has taken a hit due to the combined impact of bushfires*, drought and weak household demand, according to the NSW Business Chamber’s latest quarterly Business Conditions Survey.

The December quarter survey reveals business conditions to be weak across the state, with weather-related events being by far the primary factor weighing down business performance and confidence.
Hunter Business Chamber CEO Bob Hawes said while the Hunter had avoided the worst of the bushfires, the economic impact of the fires was still significant in some parts of the region, exacerbating business downturns brought on by prolonged drought.

“Even before the fires hit, we were receiving feedback that the ripple effect of drought was being felt across main streets in rural townships and, in fact, right down the valley to Newcastle,” Mr Hawes said.

“The fires resulted in a lot of lost tourism trade and booking cancellations, because people opted to stay at home, and our vineyards are looking at a major loss of crop due to smoke taint, which will have a significant impact on an industry worth more than $500million to our region.”
Weak household demand is hurting business, with respondents’ perceptions of the performance of the economy down, and indicators such as staffing and capital spending also falling sharply.

“This time of year normally offers a welcome boost to business trade but conditions have moved in the opposite direction.” Mr Hawes said.

“We are fortunate in our area to have export and manufacturing industries with broad national and international markets, which have more capacity to weather the regional downturn, and our construction sector is still buoyant.

“However, we do encourage people to get behind our businesses by buying local, because our communities depend on them for employment and economic opportunity.”
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*The survey only partially captures the impact of the bushfires with the survey period preceding the deterioration of conditions in late December and January.