South Australian business confidence doubles

01 November 2018

Business confidence in SA has surged, according to new research from BDO. The firm’s annual survey of small/medium sized businesses, found 56% of respondents were confident that the state economy is improving, up from just 25% in 2017.

In its fifth year, the BDO SA State Business Survey questions South Australian small to medium businesses covering issues including energy, business sentiment, profit expectations, cyber security and hiring of staff in the state.

BDO Business Services partner David Fechner was not surprised at the improving optimism within the state “When listening to our own clients, we’ve heard that consistent message.”

However, the survey also highlights some headwinds, particularly with energy costs and recruiting the right staff. “Only 43% said SA was a low cost place to do business.”

The survey also found that 61% believe population growth is very important to the state’s economic growth, with 47% struggling to find and retain suitable staff.

“It’s increasingly difficult for small businesses to recruit the right people, with most saying this is due to a lack of suitably qualified candidates.”

The Tourism, Leisure and Hospitality, Agribusiness, Technology, Media & Telecommunications and Finance / Banking sectors are most affected by the struggle to find suitable staff.

“Half of respondents from these sectors said they don’t believe our education system is developing graduates with suitable skills.”

Energy is still an issue, with 27% worried about reliability, while 43% were concerned by energy costs. These concerns have prompted a third of respondents to investigate investment in alternative energy.

Another key finding of the survey highlighted that one in five businesses experienced a cyber-attack over the past 12 months. This was less than the previous year, however respondents reported the impact of attacks was more damaging. As a result, 50% of businesses plan to increase their IT spend over the coming 12 months.

Tax reform is still on the agenda but many SA businesses are looking to the state government for more direct investment. Support for an increase to the GST in exchange for lower state taxes is at 50%.

“Given five minutes with the Premier, just over 30% of respondents would ask him to prioritise targeted investment in the local economy over tax or tariff relief measures,” Mr Fechner concluded.

About survey respondents:

  • Annual turnover
    • 57% - $0-$2 million
    • 15% - $2 million to $5 million
    • 7% - $5 million to $10 million
    • 10% - $10 million to $20 million
    • Remainder over $20 million
  • Staff numbers
    • 67% employ up to 20 staff
    • 26% employ 21 to 100 staff
    • Remainder employ over 100 staff.