Article by Adrian Lowe & Cheyanne Ensisco courtesy of the West Australian.
Costs and labour shortages burden WA companies.
Business confidence in WA has slumped to its lowest level since the onset of the pandemic nearly three years ago as companies battle cost pressures and skills shortages.
Four in five businesses across the State struggled to fill a vacant position in the three months to December, according to the latest business confidence survey by the Chamber of Commerce and Industry WA to be released on Wednesday.
On average, each business is trying to fill six vacancies — with professional services, resources and retail most affected. Four in five report struggling to find particular skill sets.
“Increased cost pressures and persistent skills shortages have dampened WA’s festive spirit,” CCIWA chief economist Aaron Morey said.
Three in five reported lifting base wages in response to persistent labour shortages — the average increase through an annual wage review is just under 11 per cent, an increase of four percentage points over the quarter.
Mr Morey said the cost pressures as well as persistent and broadening inflation were damaging bottom lines. About 60 per cent reported declining profit margins.
Todd Kempton, director of mobile caterer Locale Kitchen, is confident on business demand for next year — he is booked out and already taking 2024 bookings.
But he said staff costs were rising and he was paying a premium of between 15 and 25 per cent just to find labour. Mr Kempton, pictured, has not yet raised prices but said he expected that to happen soon.
“You try to get the staff you can, you can’t really get them so you offer more money,” he said. “You also pay more because you’re trying to overstaff yourself . . . in the eventuality that someone’s sick or someone doesn’t show up.”
The CCIWA results come after a snapshot from National Australia Bank showed business confidence across the country was at its lowest level in almost a year.
“Firms have become increasingly pessimistic about the future as they look ahead to a slowing global economy and a period of weaker consumption as inflation and higher rates weigh on households,” chief economist Alan Oster said.
But consumers appear to have shrugged off last week’s interest rate rise, with ANZ’s weekly consumer confidence survey and Westpac’s monthly sentiment measure higher.
Westpac chief economist Bill Evans said said inflation concerns were not easing despite the unprecedented pace of interest rate hikes since May.
