Business conditions are at their weakest level in three years, according to the NAB Monthly Business Survey, with pressure mounting on the Federal Government to offer some relief.
According to the survey, business conditions deteriorated to their weakest level in three years in May, falling four points to -4 index points.
The degree of weakening in activity over the past couple of months suggests the economy is struggling, with conditions in some of the previously “strong” industries – namely mining and finance/business/property – also looking somewhat laggard.
Activity in these industries has largely been influenced by worsening external factors, including resurgent fears about the future of the euro.
Forward indicators of demand provide no signs of improvement, with particularly low levels of capacity utilisation not boding well for activity in coming months.
The news comes ahead of the Prime Minister’s Economic Forum, being held in Brisbane today and tomorrow. Prime Minister Julia Gillard will kick off the forum with a keynote address to a dinner tonight.
The forum continues tomorrow with five sessions, including Australia’s Patchwork Economy and the High Dollar.
The other sessions are Economic Transformation: Innovation and Collaboration; Investment in Productive Infrastructure; Building the Workforce: Skills and Education; and Competition and Deregulation Reform Agenda.
Small business representatives will be among the 130 leaders of Australian business, unions and the community invited to attend the forum.
Peter Strong, executive director of the Council of Small Business of Australia, says he’s pleased to have two representatives at the forum.
In addition to Strong, COSBOA will be represented by COSBOA deputy chair Amanda Lynch, who is also chief executive of the Real Estate Institute of Australia.
“We will certainly be focused on competition and regulatory reform but will also give attention to the role of small business people in innovation, economic transformation and change management,” Strong says.
“We will seek simple solutions that will cost the government very little, if anything. We need to make sure barriers created by red tape are removed.”
“There is too much overlapping regulation from federal, state and local governments.”
“We need to rationalise processes around recordkeeping, workplace relations, paid parental leave, superannuation and payroll tax.”
“We also need to address issues such as approvals for local development applications, access to finance, ease of travel in the region, and identification of new opportunities for small business people.”
The Victorian Employers’ Chamber of Commerce and Industry will also attend the forum. VECCI will be represented by president Peter McMullin.
“We are delighted to be asked to participate in this important forum… and we hope the economic concerns of the business community will be considered in the forum discussions,” he says.
“Of particular interest will be discussions on the effect of the high dollar on the economy, as well as discussions on building our workforce and the deregulation reform agenda.”
“We look forward to learning of the government’s plans to maintain a focus on productivity and growth with all economic factors considered.”