The Westpac and Charles Sturt University (CSU) Agribusiness Index for the September 2007 quarter shows a downturn in agribusiness activity and confidence for regional NSW and northern Victoria.Mr Tom Murphy, Chief Executive Officer of CSU’s Western Research Institute (WRI), said NSW was the most drought affected state and the downturn in agribusiness activity was reflected in its Economic Performance Index (EPI). The EPI gives a value between -1 and 1 based on the average of results from a survey of farmers and ‘up-stream’ and ‘down-stream’ farming businesses.
Mr Murphy said, “The strong Australian economy and high commodity prices have softened the impact of the drought somewhat, but the high Australian dollar is eroding the competitiveness of the agribusiness sector bringing yet another challenge to farmers.
“The rain in late June and a strong national economy lifted the Index slightly in the September quarter, however the lack of follow-up rain has seen business confidence plummet.”
- The NSW North West region (including Dubbo) recorded an EPI of -0.20 which was higher than the June quarter when it was the worst performed region. Only 50 per cent of farmers are confident about the coming summer season, down from 67 per cent in the June quarter.
- The Central West region (including Bathurst and Orange) was the third worst performing region in NSW, however its negative EPI of -0.26 was an improvement on the June quarter result. Only 32 per cent of farmers are confident about the summer season, well below the 51 per cent recorded for all NSW and a sharp decline from 81 per cent in the June quarter.
- The Murrumbidgee region (including Wagga Wagga) continues to outperform most other regions in NSW despite the drought; the impact of continuing low rainfall and zero water allocation had resulted in a drop in the EPI for the region (-0.06) which was substantially better than for NSW overall (-0.19). However, business confidence has plummeted with only 48 per cent of farmers confident about the coming summer season, down from 88 per cent in the June quarter.
- The NSW Murray region (including Albury) recorded the worst result with -0.34, a sharp decline from -0.17 in the June quarter. Despite this poor result, agribusinesses in the region remain more confident about the summer season than the State average.
- The Ovens-Murray region in Victoria (including Wodonga) fell to -0.12 which is slightly higher than for Victoria, which recorded -0.15. Business performance and employment levels were negative, however capital expenditure increased slightly in the region. Only 56 per cent of farmers were confident about summer, a sharp decline from 72 per cent three months ago.
The Westpac and CSU Agribusiness Index is a quarterly survey of Australia’s agribusiness sector conducted by WRI. A telephone survey was conducted with respondents drawn from the 48 statistical divisions of regional Australia, with a mix of both primary producers, and businesses upstream and downstream of the agricultural sector. The September 2007 survey resulted in 1 196 responses.
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