Business and consumer confidence remains strong in South Australia

A strong job market has young South Australians in particular confident about the economy and their ability to get ahead, the BankSA State Monitor says.

South Australians have shrugged off consecutive interest rate rises and a surge in living costs to remain confident about the economy and their ability to spend up big or change jobs.

Young people in particular are upbeat, with the 25-34 year demographic the most confident consumer segment, with only the 50+ cohort reporting a decrease in consumer confidence.

The latest BankSA State Monitor Survey shows business confidence remains buoyant at 119.2 points – where 100 is a neutral level – falling just 2.2 points over the past four months, while consumer confidence has moderated by just 0.5 points to 112.4.

BankSA state general manager, business, David Firth said that while consumers and business were more concerned about their own financial position than previously, confidence around jobs remained strong.

“South Australians are less worried about unemployment and have greater confidence they could change jobs if needed,” Mr Firth said.

“The slight overall decrease in consumer confidence saw a reduction in spending, both on significant purchases over the past three months and intention to make any significant purchases in the coming three months.

“However, businesses were more positive about spending, with increased intention to make a significant purchase in the next 12 months.’’

Mr Firth said while confidence levels were lower than highs recorded in 2021, both consumer and business confidence were above the average for the preceding nine years.

BankSA state general manager business David Firth. Picture: Supplied

The most confident consumer segment was people aged 25-34, while blue collar workers were more optimistic than their white collar counterparts.

On the consumer front, the factors which contributed most to confidence were SA’s long-term outlook, employment and income security, and Australia’s long-term outlook.

On the downside, petrol prices, world affairs and the state of the world economy were cause for pessimism.

Businesses were also concerned about petrol prices and world affairs, as well as China’s influence on the nation’s economy.

Factors which contributed to a positive outlook for businesses included the household financial position of business owners, their income security, and the long-term outlook for the SA economy.

Mr Firth said rising costs and supply chain issues were the key challenges cited in the survey results.

The number of businesses experiencing a shortage of labour over recent months increased (up 4 per cent), and was consistent with the increased confidence of people around employment opportunities he said.

“Many industries, such as community services, manufacturing and the recreational sector, are tracking well above the long-term trend,’’ Mr Firth said.

“Other industries, such as the construction and transport sectors, are feeling the impacts of labour shortages, supply chain issues and increased fuel costs.”

Mr Firth said the gains in business and consumer confidence seen earlier this year from eased Covid restrictions had been tempered more recently with concerns about inflation and the general economic outlook.

“Macro-economic factors, such as the rising cost of living, tight rental market, slowing property prices and share market performance, are offsetting the gains in consumer positivity around wages growth, improved employment security and the end of Covid restrictions,” he said.

In regional SA business confidence increased 6.2 points to 1102. while consumer confidence fell 6.5 points to 107.9.