Business confidence across the New England and North West has lifted slightly, but local operators warn rising costs, skill shortages and red tape are choking productivity and holding back growth.
The latest Business NSW Business Conditions Survey shows the region’s Business Confidence Index improved from -38.5 in the June quarter to -29.2 in September. Expectations for the December quarter sit at -2.1, close to neutral.
Diane Gray, Regional Director of Business NSW for the New England and North West, said businesses are showing resilience but face mounting pressures.
“Local operators are showing grit, confidence is edging back, but insurance, energy and government charges are biting hard, and persistent skill shortages mean many can’t capture opportunities even when demand returns,” Ms Gray said.
She said practical action is needed if the region is to achieve the jobs, investment and productivity growth communities want.
“If we want our region to make the change we want, with more jobs, investment and higher productivity, then we need practical relief on costs, faster planning decisions, and a reliable pipeline of skilled workers,” Ms Gray said.
Insurance has again been identified as the top cost concern, a position it has held for more than two years. Taxes, levies and other government charges follow, with energy costs rebounding as a major issue for local firms. Businesses also point to rising supplier costs, wages, transport, rent and loan repayments as further challenges.
Across the state, 97 per cent of businesses reported barriers to productivity, with the three biggest pressures being business costs, access to skilled labour, and regulatory or compliance burdens.
Despite the headwinds, most businesses are not looking to shed more staff. While one in four firms across NSW reduced staff in the past three months, 84 per cent expect to maintain or grow staff numbers in the next quarter.
However, access to workers remains the critical roadblock. Ms Gray said skills and housing solutions are urgently needed to attract and retain employees.
“Our region is primed for growth, from advanced manufacturing to retail and professional services, but the cost stack and workforce bottlenecks are slowing the pace,” she said.
Business NSW has called for targeted reforms to help regional businesses, including action on insurance affordability tailored to regional risk profiles, lower government-imposed costs to restore margins and encourage investment, skills and housing policies to attract and retain workers, and improvements to the planning system to reduce delays and uncertainty for projects.
Confidence is trending upward across most regions in NSW, with the state’s index lifting from -50.8 in the June quarter to -40.0 in September. The state outlook for the December quarter has improved to -12.0, the highest since September 2021.
Business NSW said the survey results show regional businesses are ready to invest if governments address the structural pressures weighing them down.
“Practical reforms will help New England and North West businesses choose their path with confidence to invest, hire and lift productivity,” Ms Gray said.
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