The public have been urged to get out and support their local businesses following a forecast 11% average drop in Christmas trading across NSW.
A survey of businesses from across the state released in the latest Business Conditions Survey has revealed 61% of businesses are expecting Christmas trade to be down compared to last year, with only 17% anticipating an uptick.
Sydney business are expecting an average 4% downturn from a year ago, while their regional counterparts are expecting a sharper decline of 13%;
Business NSW CEO Daniel Hunter said people need to “get out there and support our local business through what will be a tough Christmas for our communities”.
“The state’s business community needs to capitalise on Christmas but tell us that this latest interest rate rise means less foot traffic, less sales and less contracts coming through the door,” Hunter said.
“Members are telling us the most recent interest rate hike from the Reserve Bank has hit business confidence, but there is hope.”
Despite the downbeat sales predictions, the headline Business Confidence Index has improved to -57.6 in the last quarter of 2023, the highest reading in three quarters.
In addition, the majority of NSW businesses are predicting that they will maintain their workforce headcount for the next quarter, and also forecast that Business Confidence will continue to rise.
“We applaud the NSW Government for introducing business measures to help in these tough times for those with loans, including changes to procurement rules, moves to scrap the Emergency Services Levy and energy support to small and medium business,” Hunter said.
“The focus on providing affordable housing in the right place for key workers will take a time to feed through but is a big step in the right direction for our members whose staff are struggling to pay their rent.
“We are very concerned that the recent interest rate rises also come at a time when the Federal Government is proposing industrial relations changes which will further increase the cost of doing business.”
The survey also revealed insurance, rental costs and energy – followed by taxes, levies and government charges – remain the top cost concerns for businesses.
The results follow an Australian Retailers Association survey in collaboration with Roy Morgan that found 30% of shoppers will cut their Christmas spending budgets in 2023.
As a result, the average gifting spend is tipped to be $646 per person, down from $700 in 2022.
Latest ABS stats show rise in alcohol spending
Household spending in October was 2.7% higher than a year ago according to figures released today by the Australian Bureau of Statistics (ABS).
Robert Ewing, ABS head of business statistics, said growth in household spending has slowed in recent months, as households tighten their spending amid cost-of-living pressures.
“The 2.7%i ncrease in the year to October follows a downward pattern after spending rose 5.2% in the year to August, and 4.3% in the year to September.
“Less spending on discretionary services such as eating out, accommodation, and recreation and cultural services all contributed to the slowdown.
“Compared to October last year, discretionary spending fell 2%, while non discretionary spending rose 7%.”
The overall rise in household spending was driven by increases in transport (+13.4%), health (+10.8%), and alcoholic beverages and tobacco (+7.1%).