The confidence wave continues to build in South Australia as business owners look to kick off a brighter year ahead.
The overall outlook for our economy is rosier than the past quarter, up 13 points, as South Australia’s response to the COVID-19 pandemic fuels optimism across sectors.
Labour force availability, however, is emerging as a key concern among business owners.
Almost 12 months on from the pandemic, and South Australia has well and truly put the worst behind it with business confidence and conditions above the 10-year average and substantially higher than the depths of last March.
The Government handling of the pandemic from both a health and economic stimulus perspective is no doubt a key reason for the healthy amount of optimism.
However, this confidence may be eroded in the future if the erratic and non-uniform approach to snap lockdowns and border closures is not addressed.
This is clear from the overwhelming and indeed polarizing response from business owners to South Australia’s Parafield Gardens circuit breaker lockdown in November last year.
The divergence of views from business owners should sound a warning bell for decision makers that more practical solutions to outbreaks should be considered to help maintain business and consumer confidence.
The workforce availability issue should also be cause for concern.
The survey found 35 per cent of business owners found it harder to attract labour in the December quarter with 58 per cent blaming a lack of incentive due to increased JobSeeker payments for finding workers.
When it comes to JobKeeper, it appears South Australia should avoid the feared “cliff” scenario with just 30 per cent of SA businesses qualifying for JobKeeper for the March quarter (down from 60 per cent for JobKeeper 1.0).
In saying that, 68 per cent of SA businesses agreed the wage subsidy scheme should continue past its 28 March cut-off date for those industries most impacted by ongoing COVID-19 restrictions such as those around international tourists, events and hospitality.
While some businesses continue to be materially impacted by COVID-19, with 15 per cent reporting their turnover remains down by more than 50 per cent, on the flip side a third of businesses reported that 2020 was their best ever financial performance or the best in five years.
Further, around 34 per cent believe their business is operating better since the onset of the pandemic due to improved systems, greater efficiency, and elimination of waste.
And the opportunity to grow is ripe with the survey finding 50 per cent of businesses are either currently considering a merger or acquisition or will possibly do so in the next five years. The majority plan to be the seller in this scenario.
All and all, South Australia is tracking well but our current business confidence is underlined with caution with debt repayments and continuing COVID-19 uncertainty not going anywhere in the medium term.