VECCI's latest Business Trends and Prospects Survey shows that the short-term outlook for the Victorian economy is slightly 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 nearly six months 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 19 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, 17 percent of businesses from metropolitan areas forecast stronger growth in the Victorian economy over the next twelve months.
"Regional respondents are similarly optimistic in relation to growth prospects for the Australian economy, with a total of 25 percent of both regional and metropolitan respondents anticipating stronger growth over the forthcoming twelve months", says Mr Coulson.
"Regional respondents are now more optimistic about future national growth than they were in the June quarter 2004, where 20 percent anticipated stronger national economic growth over the next twelve months for the Australian economy.
"However, while regional prospects are bright, many businesses were still doing it hard over the last three months - on a net balance basis, only a net 1 percent of regional businesses reported an improvement in general business conditions over the September quarter 2004. This compares with the 9 percent of metropolitan-based respondents that reported an improvement in general business conditions.
"This is possibly due to the lingering effects of the drought in some regional areas and slowly recovering international markets. Metropolitan respondents also reported a more favourable performance than their regional counterparts in terms of sales, exports and profitability. Regional respondents reported a more positive performance in terms of employment and investment.
Regional Versus Metro Business Performance - At a Glance
|
Business Indicator - Net Balance September Quarter 2004 |
Metro % |
Regional % |
|
General Business Conditions |
9 |
1 |
|
Sales |
18 |
11 |
|
Exports |
16 |
6 |
|
Wages Growth |
42 |
45 |
|
Other Labour Costs |
34 |
30 |
|
Selling Prices |
9 |
8 |
|
Profits |
-5 |
-9 |
|
Employment |
6 |
7 |
|
Overtime |
4 |
-4 |
|
Buildings and Structures Investment |
6 |
16 |
|
Plant and Equipment Investment |
12 |
19 |
Net balance basis represents the difference between the proportion of businesses reporting an improvement and those reporting a deterioration.
"The key challenge for the State Government heading into 2005 will be to keep this momentum going with sensible policies that lower business costs and reinforce Victoria's attractiveness as a place to invest.
"In this context, speculation about carbon taxes and their potential impacts on the price of power will not improve business confidence going forward", says Mr Coulson.
For all media enquiries, please contact:
VECCI Strategic Communications
Ph: (03) 8662 5226
email: media@vecci.org.au |
