Although national agribusiness performance showed an overall decline in the June quarter, the outlook in September was for a major improvement, according to the third quarterly report on the Westpac & Charles Sturt University (CSU) Agribusiness Index.
The Westpac & CSU Agribusiness Index, which provides agribusinesses with national, state-wide and regional overviews of business performance, showed poorer than expected economic performance across Australia during the June quarter.
Reviewing trends indicated by the June quarter Index, the Chief Executive Officer of CSU’s Western Research Institute Tom Murphy believes “widespread rainfall across southern Australia has substantially improved business outlook for agribusinesses in the September quarter”.
“Overall, investment and employment indices were down across the nation but business performance held up buoyed by strong consumer demand. Producers’ confidence soared when the rain finally came at the end of the quarter, boosting business performance, particularly for upstream suppliers selling seed, fertiliser and equipment for the upcoming winter cropping season.”
The Westpac & CSU Agribusiness Index provides an Economic Performance Indicator (EPI) for each State based on the average results collected from all regions. Key State and territory results from the June quarter include:
- Western Australia recorded a negative EPI of -0.07, with producers reporting declines in employment and cost pressures. The South Eastern region recorded one of Australia’s highest EPIs of 0.13. Seventy-two per cent of agribusiness owners are confident about 2007-2008.
- Cyclone-devastated North Queensland regions have put the worst behind them with mostly positive June quarter EPIs. The Statewide EPI was -0.04, the second strongest state after Tasmania, with 74 per cent of agribusiness operators are enthusiastic about the year ahead.
- While the strongest state, Tasmanian agribusiness owners are affected by mainland operators’ poor performance. The EPI declined to -0.03. Around 72 per cent of agribusinesses are still confident for the year ahead. Producers blamed sluggish performance on increased fodder and other operating costs.
- New South Wales’ EPI deteriorated to -0.13 in the June quarter, largely the result of declining capital expenditure and employment. New South Wales agribusiness owners were Australia’s most optimistic with 82 per cent of operators confident about the next 12 months.
- Early June floods devastated Victoria’s Gippsland region. Victoria joined New South Wales as the most under-performing states, with an EPI of -0.13. About 76 per cent of Victorian farmers are confident about the year ahead, with outlooks suggesting improvement.
- South Australia’s high March quarter confidence has encouraged improvement to an EPI of -0.12, with indications of a move into positive territory in the September quarter, with 74 per cent remaining confident about the next 12 months.
The Westpac and CSU Agribusiness Index is a quarterly survey of Australia’s Agribusiness sector conducted by Charles Sturt University’s Western Research Institute. A survey is conducted via a phone questionnaire with respondents drawn from the 48 statistical divisions of regional Australia with a mix of primary producers and businesses upstream and downstream of the agricultural sector. The June 2007 survey resulted from around 1 200 responses.
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