Michael Aird, MLC Treasurer

Tuesday, 6 May 2008
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TCCI Survey of Business Expectations
The Treasurer, Michael Aird, today said the latest TCCI Survey of Business Expectations showed Tasmanian businesses continued to have positive growth prospects.
Mr Aird said the TCCI’s business barometer indicator showed Tasmanian businesses believe growth will continue.
“While softer than the previous quarter’s result, it remains above the 50 threshold, which indicates the majority of survey respondents believe there are growth prospects for their businesses,” he said.
“Similarly, the general business conditions index declined in the March quarter but also remains in overall positive territory.”
Mr Aird said it was pleasing that Tasmanian businesses expected to increase their capital expenditure on building and structures and plant and equipment in the June quarter.
“Capital expenditure expectations for the June quarter remain above the 50 threshold, so businesses expect increased expenditure going forward.
“This is supported by recent data which show record levels of engineering construction work completed over the past year.”
Mr Aird said that that it was not unexpected that some indicators had softened from the March quarter survey results.
“It is not surprising to see an easing in some indicators and that confidence in both the Tasmanian and the national economies is lower than previous highs,” he said.
“This is entirely consistent with what is happening nationally and the Reserve Bank’s deliberate intent to slow domestic demand through interest rate rises.
“Tasmania is not shielded from the RBA’s actions.
“Survey respondents reported that the cost of finance/interest rates had become an increasing constraint on business growth in the March quarter.
“Inflationary pressures, with higher petrol prices and energy costs, will be having an effect on Tasmanian businesses.
“However, despite these headwinds, the survey clearly shows general business conditions remain in positive territory which shows the overall robustness of the business sector and the Tasmanian economy.”
Mr Aird said the survey showed the availability of suitably qualified employees continued to be the main constraint on business.
“Improving educational outcomes is a major focus for the Government.
“We are addressing the skills shortage through the Demographic Change Advisory Council and the Government’s Tasmania Tomorrow initiative, which is focused on improving post-school education and training opportunities.”