The employment outlook of the Hunter has changed, with one in five businesses expecting to cut staff in the next three months and 56 per cent anticipating zero growth, according to new data.
The Business Conditions Survey (BCS) - conducted by Business NSW in collaboration with Business Hunter - is the most informative temperature check of businesses across the state. This quarter, it revealed fragile sentiment, weakened by nine successive interest rate hikes and increasing costs of doing business.
Business Hunter CEO Bob Hawes said in the same period online job advertisements across the region, as measured by the National Skills Commission Internet Vacancy, had dropped by more than 15 per cent, likely to be reflecting the change in hiring intention coming through the BCS.
"It's probably no coincidence that we're seeing online job advertisements fall off a cliff, with the BCS revealing that 75 per cent of businesses are looking to either maintain or reduce their current headcount in the short term," he said.
"Businesses frustrated by not being able to fill positions, as well as those taking a conservative approach regarding future hiring intentions because of the state of the economy, are withdrawing from advertising jobs online.
"The message resonating loud and clear this quarter is that business sentiment has changed, and conditions are undeniably challenging at present."
When asked to rate their business prospects, 56 per cent of Hunter businesses indicated they had "just enough business activity to survive", while 5 per cent were "very likely headed for shutdown".
Mr Hawes said many businesses across the region were battening down the hatches at a time when they were expecting to recover from flat trading or losses incurred during the COVID-19 pandemic.
"While many businesses continue to raise genuine concerns about availability of workers and enduring skills shortages, some are starting to cut staff amid a slowdown in trade, which is a worrying sign," he said.
"Across the state ... workers/skills shortages are being compounded by the rising cost of doing business, which businesses have now ranked as the biggest barrier to operating at full potential.
"The cost of doing business has been creeping up on us and is now at the top of the leader board of issues impacting business."
Melanie Chapman, owner of Pegs café in Whitebridge, said small businesses had not received enough support.
"Tax costs are killing small businesses, and this has to be resolved if we want to keep our small businesses alive. When it comes to weathering economic storms, small businesses are on the front line, and minimising our exposure is an urgent need. When COVID hit, tax cuts and apprenticeships support were rapidly rolled out, and they've been turned off at a time when it's needed most," Ms Chapman said.
"You know conditions are tough when regulars stop buying their daily coffee, or share a meal instead of buying their own. Sadly, we've entered that phase, and the conditions that are making it tough on them, in turn make it tough on us."
The BCS also shows that businesses in the Hunter continue to be more affected by rising energy costs than the NSW average, with one business indicating they were bracing for an imminent 39 per cent increase in energy costs.
"We need renewables to come online faster to reduce volatility in the market," Mr Hawes said.
"This election we're calling for a new government program to support SME's to decarbonise and reduce their exposure to bill shock. At a broader level, we're urging the incoming government to support the NSW government's Electricity Infrastructure Roadmap and rapidly accelerate approvals for large scale renewable energy projects to ensure energy security for business."
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