Western Australia's peak business body says rising costs are savaging regional businesses.
The Chamber of Commerce and Industry in Western Australia has released a new report which shows a decline in confidence and profit margins for regional businesses.
The report states that 81 per cent of regional WA business respondents see lack of available skilled labour as a barrier to business growth in the coming year.
Rising operating costs are the next greatest area of concern, with 79 per cent of regional respondents saying this will be an issue.
In the Great Southern, this figure rose to 100 per cent.
Among the businesses feeling the brunt is Albany pet shop general manager Lynelle Dusterhoft, who says she has seen the effect of various pressures on business in recent months.
"[Labour shortages] is an issue," Ms Dusterhoft said.
"We've managed to put in a plan B. We actually do have a bigger budget on our wages, which obviously puts pressure on the business."
Ms Dusterhoft said she had upped the wages of her staff above current award rates in order to keep staff on.
"For the long term, we want to retain the staff. It's very difficult to get staff in more rural areas."
Ms Dusterhoft said supply chain issues were another significant problem for business.
"The problem is [suppliers also] have staff issues," she said.
"So then, because they have staff issues, they can't deliver, and that just becomes a rollercoaster."
Ms Dusterhoft said the situation had created a domino effect that was now impacting customers.
"It doesn't just [impact] us as a business, it [impacts] the customer because … we put our prices up, and so it just becomes a circle," she said.
"Our staff, we've had to pay them more … we chose to, but also the rate has gone up … so the price has gone up because of that as well.
"Bottom line: it affects your profit."
Chamber calls for government action
Chief Economist for the WA Chamber of Commerce and Industry (CCIWA), Aaron Morey said there was hope that the reopening of international borders would lessen skill shortages, but unfortunately, that had not been the case.
"People are certainly starting to come to the state," he said.
"But it's not enough to relieve that pressure in Western Australia or anywhere else in the country."
Mr Morey said the CCIWA was "imploring the federal government to make it much easier for businesses to bring in those workers".
"Nationally, what we've got is a very confused system of different skills lists that businesses need to navigate.
"We're certainly going to be putting forward our representations on behalf of the WA business community to make sure the system is as efficient and easy to use as possible."
Mr Morey said there were currently 1.4 job vacancies for every unemployed person in WA.
"Remember, the definition of a person who's unemployed is someone who wants a job," he said.
"That, more than any other statistic in our economy, obviously identifies and highlights the critical need to bring in those overseas workers."
According to the CCIWA's report, the Great Southern region's most in-demand professions currently are mechanical and trade, construction, and education.
