MEDIA
RELEASE
COMMONWEALTH BANK – ACCI BUSINESS EXPECTATIONS SURVEY
MR 134/10
WORKING IN PARTNERSHIP FOR THE FUTURE OF AUSTRALIAN BUSINESS
Tuesday 2 November 2010
Commonwealth Bank – ACCI Business Expectations Survey
PRIVATE SECTOR-LED RECOVERY SLOW TO EMERGE
The November 2010 Commonwealth Bank –
ACCI Business Expectations Survey
finds that most business actual
indicators deteriorated or remained unchanged over the September quarter, except for the indexes of Wage Growth,
Non-Wage Labour Costs and Selling Prices. All of the expectations indicators have declined compared to their June
quarter’s forward projections.
Overall business sentiment fell in the September quarter amidst the prospect of rising interest rates, withdrawal of
government stimulus spending and increasing uncertainty about the strength of global economic recovery. The index
of Expected Economic Performance fell for the third successive quarter from its historic peak recorded in December
2009, indicating business confidence has continued to moderate.
Comparisons by Size of Firm reveal that small firms have recorded the weakest performance compared to medium and
large businesses, with small businesses’ conditions, employment and investment in plant and equipment remaining
contractionary during the September quarter.
Mr. Greg Evans, Director of Economics and Industry Policy, Australian Chamber of Commerce and Industry,
commented:
It is concerning that pressure points in the economy have become more evident over the last three months. Business
confidence, which had been overly optimistic since the middle of last year, has moderated over the September quarter.
Weakness in selling prices coupled with increasing labour costs have continued to put downward pressure on business
profits which limits the ability of business to employ and invest.
One positive note from the survey are signs of moderating price pressures which is consistent with the September
quarter CPI results, hence providing the Reserve Bank more flexibility and decreasing the need for
a November
interest rate increase. A deferral in interest rate adjustments will provide much needed breathing space for businesses,
especially small business, to regain stronger footing.
Mr. Symon Brewis-Weston, Executive General Manager, Corporate Financial Services Commonwealth Bank,
commented:
As we move toward the end of 2010, business owners are still finding conditions tough with an expected decline. This
is being compacted by increasing cost pressures as wages and non-wage labour costs have increased again over the
quarter. According to the survey, wages are trending higher and have been doing so since the June quarter of last year.
While confidence is set to recover as trading conditions improve in the December quarter, business owners are
concerned about anticipated interest rate rises in coming months. For businesses, this means we are likely to see
subdued business investment for at least another quarter as businesses manage increasing cost pressures, gain more
certainty around interest rate outlook and see if anticipated improved trading conditions in the December quarter
materialise.
The survey assessed business conditions and business confidence amongst 2,537 businesses around the country over
the July, August and September period. A full copy of the Survey is available on the ACCI website at
For further information:
Greg Evans
Director of Economics and Industry Policy, ACCI
02 6273 2311 / 0407 204 559
Brett Hogan
Director of Communications, ACCI
03 9668 9950 / 0407 273 884
Adam Welch
Associate Media Adviser, Commonwealth Bank
02 9117 7052
NEWS 
