Interest rate increases and the slowing national economy are having an increasing impact on sales, however businesses in the Central West region of NSW remain resilient and continue to perform well, according to the Reliance Credit Union Regional Business Survey for the 2008 March quarter.

 

Released today, Monday 14 April, by Charles Sturt University’s Western Research Institute (WRI), the survey showed that despite an overall decline in sales performance following Christmas 2007, 48 per cent of Central West businesses still reported good or very good sales performance. [see report below]

 

Consumer demand had a particularly positive impact on 71 per cent of businesses in the construction industry, while half of retail businesses benefited from the general economic climate. The strongest sales performance was recorded by business and professional service providers, followed by manufacturing businesses.

 

The region’s businesses have a positive outlook for the June 2008 quarter, with sales performance and profitability expected to increase.

 

“Over half of Central West businesses are expecting good or very good sales performance in the June quarter, and nearly 45 per cent are expecting good or very good profits in the same period,” said Mr John May, CEO of Reliance Credit Union, which sponsored the survey.

 

Capital expenditure increased in the region in line with increases across regional NSW in the March quarter. “Twenty four per cent of businesses in the region increased spending on new buildings, plant and equipment this quarter compared to 18 per cent in the last quarter,” said the Chairman of the Central West Regional Development Board, Mr Sandy Morrison.

 

“Seventy three per cent of businesses that either maintained or increased capital expenditure funded this investment with their own earnings, compared to 23 per cent who borrowed finance.”

 

WRI CEO, Mr Tom Murphy, noted that over half of these businesses invested in equipment, 24 per cent in vehicles and other plant and 17 per cent in buildings.

 

“Employment was also strong in the March quarter, with an additional four percent of businesses increasing full-time positions and an added three per cent increasing casual staff. This increasing trend is expected to continue for part-time employment in the June quarter, while full-time jobs should remain steady and casuals are set to decrease,” Mr Murphy said.