Business expects economic slowdown, higher unemployment, stronger wages pressures: Survey

Business expects the economy to slow down, unemployment to rise, inflation to ease and wage pressures to increase, according to a quarterly industry survey.

The Australian Chamber of Commerce and Industry says the survey shows that all actual and expected business indicators deteriorated over the September quarter amid global economic concerns, the strong Australian dollar and weak consumer sentiment.

“With the exception of expected wages growth all indicators have fallen below their five year averages over the quarter,” the business body says.

The ACCI survey of investor confidence is based on responses of 786 businesses across fields including mining, manufacturing, construction, retail/wholesale trade, hospitality and finance.

The survey contained questions on constraints on investment, business conditions, sales, profitability, the national economy, and expected level of activity, investment and employees.

The survey found that business taxes and government charges were the biggest constraints on business investment, followed by insufficient retained earnings and charges by lending institutions.

Questioned on their own businesses the respondents were downbeat on business conditions, sales and profitability, with current and expectation indices falling to a 13-year low.

Current business conditions section fell to 47.9 points from 49.3 in the previous quarter, the lowest level since the survey began in 1998 and below its five-year average of 57.

Most respondents (43%) described their current business conditions as satisfactory while the second most common answer was poor at 20%.

The expected business conditions sector for the first time fell into contra-actionary territory, falling to 49 points from 52.6 over the quarter. The five-year average is 59.6.

Most respondents (47.6%) expected no change in business conditions, while 27% expected a slow improvement and 22.9% expected a slow deterioration.

The current sales section dipped to 46.4 from 47.7, with most respondents (43.8%) describing current sales as satisfactory and the next most common answer poor (26.7%).

Expected sales were particularly bearish, with the index falling to a historic low of 48 from 52.4 over the quarter.

Most respondents (43%) expected no change, while 31.4% tipped a slow improvement and 20.7% expected a slow deterioration.

Current profitability slipped further to 42.8 from 43.7 the previous quarter, with 39.2% describing their current levels as satisfactory and 23.6% saying it was poor, followed by good at 13.6%.

Looking ahead, expected profitability was 45.3 points, with 47% expecting no change, 22.4% expecting a slow improvement and 21.6% expecting slow deterioration.