Many of the 380 Victorian businesses surveyed viewed the federal election campaign as lacking clear leadership and economic vision, and expressed frustration with the major political parties. Several said the prolonged uncertainty of the campaign had softened consumer spending, with one member describing the economy in this period as being “on hold with nobody spending at the moment”.
In the second quarter of 2016, which covered the three months to June 30 and most of the election campaign, business sentiment for the Australian and State economy dropped two percentage points to 20 per cent, meaning just one in five businesses expect stronger economic growth over the next financial year.
Victorian Chamber of Commerce and Industry Chief Executive Mark Stone said survey responses illustrated the need for policies that support and grow Victorian business.
“The business sentiments recorded in our most recent survey signal an opportunity for both State and Federal Governments to address business concerns and deliver pro-business policies that create jobs and enable growth,” Mr Stone said.
“While business confidence remains fragile, it is encouraging to see signs of optimism in the medium-term forecasts. We hope to see this confidence flourish as the new government gets on with the job of running the country.
“The Victorian Chamber will continue to advocate on behalf of business for policies that support major infrastructure projects in Victoria, boost jobs growth and competitiveness.” Victoria’s business services sector was the most optimistic about the economic outlook for both state and federal economies over the next year, with a third expecting them to strengthen.
Survey respondents from this sector believed the tough trading environment was exacerbated by uncertainty from the federal election campaign, but that the lacklustre performance will not last.
Businesses in the health, education and community services sector said jobs growth is likely to continue, as a lift in export activity is expected.
Regional-based businesses also reported a slightly more optimistic medium-term forecast than their metropolitan counterparts, as they recorded higher export levels and business investment.