VECCI's latest Business Trends and Prospects Survey shows that the short-term outlook for the Victorian economy is more positive among regional businesses than their metropolitan counterparts.

Of the more than 500 survey respondents, approximately 60 percent were located in metropolitan Melbourne and 40 percent were located in regional Victoria.

VECCI's Chief Executive Officer, Mr Neil Coulson, says the overall results of a survey taken after the Victorian Government's April Economic Statement revealed that regional respondents were more optimistic than their metropolitan counterparts regarding the growth outlook for the Victorian economy, with a total of 21 percent of surveyed regional businesses predicting the State's economy will experience stronger growth over the next year.  As can be seen from the graph below, 16 percent of businesses from metropolitan areas forecast stronger growth in the Victorian economy over the next twelve months.

The opposite is true with regard to future growth prospects for the Australian economy, with a total of 20 percent of regional businesses anticipating stronger growth for the forthcoming twelve months. The corresponding figure for metropolitan businesses was 24 percent.

Overall, survey respondents reported improved trading conditions over the June quarter 2004, with rises in sales, selling prices, employment and investment.  The disappointing trend in profitability and declining exports reflected strong wages growth, a still recovering global economy and a stronger dollar during this period.

Regional respondents reported more robust general business conditions than their metropolitan counterparts.  On a net balance basis, 8 percent of regional businesses reported improving general business conditions over the June quarter 2004, as opposed to a net 5 percent of metropolitan-based respondents reporting an improvement in this indicator. 

Regional respondents, however, reported weaker growth in sales, employment, profitability and investment than did their metropolitan counterparts, with the higher Australian dollar and ongoing drought in some areas no doubt being a factor.  However, regional respondents reported comparatively stronger rises in selling prices, a slower decline in exports and slower rises in non-wage labour costs.