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 in mid-September 2005 revealed that regional respondents are slightly more optimistic than their metropolitan counterparts regarding the growth outlook for the Australian economy, with a total of 22 percent of surveyed regional businesses predicting the nation's economy will experience stronger growth over the next year, as opposed to 19 percent of metropolitan businesses.

"Regional respondents, however, are less optimistic in relation to growth prospects for the Victorian economy, with a total of 14 percent of regional respondents and 15 percent of metropolitan respondents anticipating stronger growth over the forthcoming twelve months", says Mr Coulson.

"Regional respondents are slightly more optimistic about future growth than they were in the June quarter, when 13 percent anticipated stronger national economic growth over the next twelve months and 12 percent predicted stronger state economic growth.

Regional respondents also reported a slightly more favourable performance than their metropolitan counterparts in terms of sales, exports, selling prices and investment. However, wages growth was also higher in regional Victoria, possibly reflecting greater labour shortage problems.

"While business confidence and trading conditions have improved over the September quarter, the improvement comes off a low base.

"Going forward, Federal and State Government policymaking must also reflect the fact that, with the rise of China and India, Australia is operating in an increasingly competitive global environment. It is incumbent on Governments to implement relevant taxation, education and training, trade and infrastructure policies that drive growth and enable Australia to take advantage of trade opportunities in the Asia-Pacific region - the Port Phillip Bay Channel Deepening Project, for example, will be crucial to the prosperity of regional industries such as the dairy industry.

"It is also anticipated that measures in the Victorian Government's recent Provincial Statement will add to business confidence in the regions going forward," says Mr Coulson.