Sentiment among the state’s firms worsened during the past three months,according to a by peak body Business NSW. Business confidence for the coming quarter also fell.
Tina Angelidis,owner of Adora Handmade Chocolates,feels like tough times are “dragging on.”James Brickwood. SMH
Business confidence has now been subdued for the past two years as firms grapple with elevated inflation,higher interest rates and lingering weakness in consumer spending.
The NSW budget,due on June 18,will include measures aimed at supporting the state’s small and medium-sized businesses.
A government spokesman said “it will be making announcements about directing more of its $37 billion of procurement spend to support local industry and local jobs,including small businesses,in next month’s budget”.
The gloomy results of the business survey follow job figures showing rose to 4 per cent in April,up from 3.8 per cent in March. The number of unemployed people in NSW climbed to 184,000 in April,up by 30,000 compared with April last year.
‘Tough times dragging on’
Tina Angelidis,owner of Adora Handmade Chocolates,feels her business has been “back-pedalling” since the disruptions of the COVID-19 pandemic.
“The tough times are dragging on,” she said.
Consumer behaviour at the firm’s eight retail stores across Sydney has shifted during the cost of living crunch which began in early 2022.
“Our customer numbers have not really changed,but they are spending less,” she says.
The chocolate maker has also been affected by rising costs for key ingredients used at its St Peters manufacturing facility,especially imported cocoa.
“We’ve been hit with 25-30 per cent price increases,” said Angelidis who employs about 50 staff.
Angelidis said payroll tax,higher interest rates and insurance costs were the greatest obstacles facing her business. She has retained staffing levels,but overall hours have been reduced.
Nick Basile,owner of Panetta Mercato,a chain of five speciality grocery stores across Sydney,said,“high and sticky” inflation was also affecting his firm.
Tina Angelidis,the owner of Adora Handmade Chocolates,which has eight stores in Sydney.James Brickwood
“Businesses like ours are doing it a bit tough,” he said. “I think the main culprit is inflation ... and in my view it’s unlikely to be brought under control any time soon.”
Basile,who employs about 250 staff,said rising electricity prices were a major concern.
“At most of our shops we were paying about $5000 a month for electricity and that’s gone to $10,000 a month ... over the past year or so,” he said.
The economic headwinds will put additional pressure on the NSW budget already hit by a $12 billion revenue downgrade over the next four years following the most recent Commonwealth government GST carve up. Mookhey has labelled the GST cuts “absurd” and warned they would likely
Business NSW CEO Daniel Hunter called on Mookhey to push for a fairer share of GST revenue rather than slugging business with higher taxes to address
“It is vital that the upcoming NSW state budget helps bolster consumer and business confidence,” he said.
“NSW is being ripped off in the GST carve up. The answer is a fairer share of the GST,not more taxes on NSW businesses at a time when confidence and the economy are struggling to win the battle against inflation and higher business costs.”
The Business NSW survey found 46 per cent of firms in the state have “observed a decline in workers’ productivity” during the past two years while 10 per cent have seen an increase in workers’ productivity mostly due to investments in staff training.
The survey also found business owners are “generally receptive” to adopting AI in their business operations.
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