VECCI's latest Business Trends and Prospects Survey shows that, despite comparatively lacklustre trading conditions during the March quarter 2004, the short-term outlook for the Victorian and national economies is more positive among businesses located in regional Victoria compared with those located in metropolitan Melbourne.
VECCI's Chief Executive Officer, Mr Neil Coulson, says the overall results of a survey taken before the Victorian Government's April Economic Statement revealed that regional respondents were more optimistic than their metropolitan counterparts with regard to future growth prospects for the Australian economy, with a total of 28 percent anticipating stronger growth for the forthcoming twelve months. The corresponding figure for metropolitan businesses was 26 percent.
As can be seen from the chart below, regional respondents were also more optimistic than Melbourne based businesses 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. By comparison, 13 percent of businesses from metropolitan areas forecast stronger growth in the Victorian economy over the next twelve months.
Overall, survey respondents reported flat trading conditions over the March quarter 2004, with only moderate rises in sales, selling prices, employment, exports and investment. Poor profitability reflected strong wages growth and a stronger dollar during this period.
Regional respondents reported less robust business conditions than their metropolitan counterparts across most key indicators of business performance. On a net balance basis, 2 percent of regional businesses reported deteriorating general business conditions over the March quarter 2004, as opposed to a net 4 percent of metropolitan-based respondents reporting an improvement in this indicator.
Regional respondents reported weaker growth in sales, exports and employment 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 strong investment growth and slower wages growth.
Regional Versus Metro Business Performance - At a Glance
|
Business Indicator - Net Balance March Quarter 2004 * |
Metro % |
Regional % |
|
General Business Conditions |
4 |
-2 |
|
Sales |
12 |
2 |
|
Exports |
17 |
2 |
|
Wages Growth |
33 |
26 |
|
Other Labour Costs |
25 |
25 |
|
Selling Prices |
1 |
2 |
|
Profits |
-10 |
-9 |
|
Employment |
7 |
3 |
|
Overtime |
-2 |
-7 |
|
Buildings and Structures Investment |
2 |
6 |
|
Plant and Equipment Investment |
8 |
14 |
*Net balance basis represents the difference between the proportion of businesses reporting an improvement and those reporting a deterioration.
Of the approximately 500 survey respondents, 60 percent were located in metropolitan Melbourne and 40 percent were located in regional Victoria.
"While the survey results indicate comparatively stronger future growth for regional Victoria, there is a marked divergence in outlook between those predicting stronger growth in the Australian and Victorian economies among both metropolitan and regional respondents.
"The Government's Economic Statement was timely in light of these survey results, although it is crucial that, in future, all Government regulatory and policy decisions are consistent with the growth framework outlined in the Statement", says Mr Coulson.
For all media enquiries, please contact:
VECCI Strategic Communications
Ph: (03) 8662 5226
email: media@vecci.org.au |
