Home' InDaily : August 31st 2009 Contents Record Jump in Confidence --
BankSA State Monitor
Confidence among South Australian
consumers has dramatically rebounded
in the past three months to reach the
highest level in four years, according to
the latest BankSA State Monitor.
The jump in optimism is the largest
single increase in the 12-year history
of the BankSA State Monitor, the
state's leading confidence
survey, and shows a return
to optimism last seen in the
housing boom of 2003 to
With 100 index points a
neutral reading, South
confidence rose to 126.4
index points (up 16.4 points)
from an eight-year low of
109.8 in May and following a
sustained period of declines.
BankSA Managing Director
Rob Chapman said
consumers had shaken off
fears of a recession and were
much more optimistic about
their employment prospects
and job security.
"They also see clear signs business
activity is picking up and are
increasingly confident the climate
for consumer spending will improve
significantly in the next 12 months," Mr
Factors helping to bolster confidence
include a lift in the value of the share
market, the Government stimulus
packages, a more positive economic
outlook, particularly locally, good rainfall
and unemployment defying predictions.
"While there's been a major boost
in attitude, it is yet to translate to
behaviour with consumers reluctant to
loosen their purse strings. People are
focusing on reducing their debts," Mr
"Wages, cost of living constraints and
a current aversion to higher debt levels
appear to be containing discretionary
spending. Spending is likely to take
off when further economic growth is
accompanied by increases in wages."
For the second successive Monitor,
business confidence has also risen
significantly, up 9.8 index points since
May, to 123.2 index points -- a rise of
26.9 points since February this year.
"Business owners are confident about
the economic outlook and are expecting
to see immediate benefits for their own
business," Mr Chapman said.
"Despite the upbeat assessment,
businesses remain cautious about
making major investments in capital
or staff. These worries are likely
to disappear, if we see a period of
sustained economic growth and a
return in consumer spending."
BankSA State Monitor business
68 per cent are confident business
conditions will improve in the next year.
76 per cent are positive
about their business situation
but half had experienced a
decline in turnover in the past
Those employing had fallen,
with 29 per cent taking on
staff or increasing hours in
the past three months but 30
per cent expected to increase
staff numbers or hours in the
coming three months.
The manufacturing and
agriculture sectors recorded
the strongest lifts in
confidence but both off a low
base. The recreational sector
recorded the only decline.
Factors lifting business confidence
include stable and low unemployment,
positive media reports, the national
and world economy, the share market,
housing and retail, car and housing
BankSA State Monitor is conducted
three times a year and surveys 300
consumers and 300 business owners/
managers across the state.
This month's survey was conducted
between August 4 and 8,
immediately following the Reserve
Bank of Australia's decision on
August 4 to leave official interest
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