Media Release

Consumers confidence remains solid in South Australia’s regional areas despite a decrease in business confidence, according to the latest BankSA State Monitor.

Consumer confidence increased by 3.4 per cent in June to 114.4 points. This was led by the Mid North and Riverland region which increased 16.7 points to 116.4.

BankSA Agribusiness Regional General Manager, Mr Les Ryan, said localised factors were influencing confidence with varied results across different areas of the state.

“We’ve seen a significant boost in consumer confidence in the Mid North and Riverland, however the same level of confidence was not shared in the West & North, and Southern, regions which decreased this survey,” said Mr Ryan.

Consumer confidence in the West and North decreased by 10.5 points to 115.0, and the Southern area decreased by 2.4 points to 112.1.

Regional business confidence decreased by 6.6 points to 104.0 in June. This is third consecutive drop since February 2021 and it now sits well below its record peak of 135.2 points at that time.

The largest drop has been the Southern Region (including the South Coast, South East, Hills and Murray Plains) with 20.4 point decrease, slipping below the ‘neutral’ 100-point baseline to 96.2. In contrast, the West and North (which includes Upper Spencer Gulf, Far North and Eyre Peninsula) has recorded an increase in business confidence of 6.8 points to 115.7.

“The increase for West and North was driven by plans to employ more people in the coming months (up 52 per cent), and confidence to make a major purchase in the coming 12 months (up 42 per cent). Businesses in this region were also 25 per cent more confident about the outlook for their business.

“Conversely, the significant fall in confidence in the Southern Region was driven by less confidence that the climate for doing business will improve in the coming 12 months (down 49 per cent) and less ability to take on additional employees in recent months (down 30 per cent).

“The difference across regions is quite stark and can be influenced by a range of factors such as planned regional investment, transport costs, input costs and export markets.

“The agricultural sector showed a decrease in confidence, contributed by the rising cost of inputs, such as fuel and fertiliser prices. It is currently the only industry sector in the state recording below long-term average confidence levels.

“Weather patterns also have a significant impact on the agribusiness sector and this can vary across regions. For example, the South East experienced a dry summer and autumn which impacts quality of pastures and availability of feed for stock. Conversely, the west and north region had good summer and early winter rains, increasing confidence for grain growers.”

Mr Ryan said consumer confidence is less differentiated, with less than five points separating the major regions.

“Interestingly, consumer confidence across all regions was most consistently led by the view that business activity was positive. Consumers were also consistently more confident about their ability to spend in previous months and the outlook for them to make a major purchase in the coming months also.

“However, there was decreased confidence in how consumers across all the regions were feeling about their own household situation, which may reflect increased cost pressures around essentials such as fuel and groceries.

BankSA State Monitor findings for South Australia’s regions were:

Southern (South Coast, South East, Hills and Murray Plains):

• A 20.4 point decrease in business confidence from 116.6 to 96.2 points (dropping it to the lowest of the regions for business confidence);
• A decrease in consumer confidence – down 2.4 points from 114.5 to 112.1 points (the lowest consumer confidence of the three major regions).

Mid North and Riverland region (Barossa, Mid North, Riverland and Yorke Peninsula):

• A 1.8 point increase in business confidence from 104.4 to 106.2 points;
• A 16.7 point increase in consumer confidence from 99.7 to 116.4 points (the highest consumer confidence of the regions).

West and North (Upper Spencer Gulf, Far North and Eyre Peninsula):

• A 6.8 point increase in business confidence from 108.9 to 115.7 points (lifting it to the most confident region for business in regional SA);
• A 10.5 point decrease in consumer confidence from 125.5 to 115.0 points.

Statewide, combining both regional and metropolitan areas, business confidence increased by 2.8 points to 121.4 points, the first increase in confidence since July 2021.

Consumer confidence also increased across the state by 4.4 points to 112.9 points, the first increase since February 2021 and halting three consecutive falls in confidence.