The latest information coming out of the business sector indicates a significant drop in business confidence and a unique situation developing in terms of a two speed economy.
The following summary is provided courtesy of the Institute:
"Alarmingly, this data was
compiled before any firm Carbon Tax plan was released by the federal
government, thus does not account for the affects of the proposed tax. In light
of this, confidence and sentiment in the business sector will most probably not
improve in the coming quarter.
Furthermore, job advertisements
fell, as did job creation in the past quarter.
The multi-speed economy in
Australia is presenting the business sector with the unique situation that has
the economy growing whilst at the same time making business owners retreat into
survival mode. As a result long term planning and strategy are suffering.
Interestingly employee
satisfaction levels within the business sector are higher than those of
business owner's satisfaction with their own business. This could exacerbate
already strained relationships."
Comments
place in some industry sectors - particularly in areas such as retail. The demand for resources from growing economies (like China), has created a portion of our economy moving at great speed and driving strong employment and good economic growth (when compared
to the rest of the world). On the other hand, we have a "hung" parliament and therefore a weak Federal Government very much driven by short term, political need. This is combined with "special interest" parties/independents holding the balance of power and
a growing negative approach by the opposition. This dynamic has created a belief (whether real or perceived) of increased taxes on working families and businesses. When this is combined with the world economic environment, the result is a slowing down of consumer
and business confidence. People are choosing to save or reduce debt rather than spend. Australia's economy is currently one of the strongest in the world - strong employment, good growth, developing markets, strong financial systems etc. We rode out the GFC
without moving into recession and our interest rates remained at levels that encouraged investment. But it is also a economy of contradictions!