CENTRAL HIGHLANDS BUSINESS SURVEY 2023
KEY FINDINGS
The survey registered significant gains in the overall performance, revenue, and customer indices compared to 2022, demonstrating the resilience of Central Highlands businesses in the face of challenging conditions.
Businesses are under increasing pressure due to escalating operating costs and a shortage of skilled labour.
Sentiment for the coming year is stable, with little change expected in overall performance and revenue. Encouragingly, growth is anticipated in customer and staffing levels.
Two thirds of local businesses have considered decarbonisation, with the majority (70%) focusing on energy optimisation.
OVERALL PERFORMANCE
⁘ The overall performance index increased by eight points to 64, driven by growth in revenue and customer base.
⁘ Four out of five businesses reported performing the same or stronger over the past 12 months.
⁘ Confidence for the upcoming 12 months remains stable, with the index projected to drop by only one point.
⁘ The ‘repair and maintenance services’ sector reported the lowest confidence level when looking ahead.
The index score is developed from the qualitative survey answers, creating a value between 1 and 100. As a guide, 50 to 55 would indicate the performance was neutral, less than 50 weaker and above 55 stronger.
REVENUE
⁘ The revenue index increased by 12 points, with almost half (48%) of businesses stating an upswing in revenue over the past 12 months.
⁘ The ‘construction’ sector reported the greatest increase, while the ‘repair and maintenance services’ and ‘agriculture, forestry, and fishing’ sectors registered the greatest decrease.
⁘ While strong revenue results are evident, they are offset by the challenge of high costs.
⁘ Business optimism for the coming 12 months remains steady, with the index expected to rise by just one point.
CUSTOMERS
⁘ The customer index increased nine points to a high of 65. Just under half (45%) of businesses reported an uplift in activity.
⁘ The ‘construction’ sector reported the highest increase, while the ‘food and beverage services’ sector registered the greatest decrease.
⁘ Customer numbers are expected to strengthen over the next 12 months, with the index forecast to increase by a further five points.
STAFFING
⁘ Staffing remains a critical issue for Central Highlands businesses, with the index remaining below par at 47 points.
⁘ Over a quarter (27%) of businesses experienced a decrease in staffing.
⁘ The ‘food and beverage services’ sector reported the greatest decrease.
⁘ The 12-month forecast is positive, with the index expected to increase by 11 points. Achieving this growth, however, will be dependent on businesses successfully filling their vacancies.
60 51 47
40
40 48 46
20
58 0
COSTS
⁘ Central Highlands businesses are facing record high costs, with four out of five experiencing an increase over the past 12 months.
⁘ The ‘food and beverage services’ and ‘repair and maintenance services’ sectors reported the highest increase, although levels were notably high across all sectors.
(2024) 1 1
80 (Index Score) Mar ’20 Jul’20 2021 2022 2023 2024 (Forecast) 62
⁘ Businesses are not envisaging much of a reprieve over the coming 12 months, with the index forecast to remain significantly high at 90 points.
93 16% 86%
91 16% 84%
90 26% 80%
CURRENT No change No change
60
80 53
40
57% 14%
20
27% 29% 3%
55% 13%
62% 18%
93
81 91 90 0
12% 2%
(2023) LAST YEAR (2022) Decrease Decrease
100 (Index Score) Mar ’20 Jul’20 2021 2022 2023 2024 (Forecast)
CAPITAL INVESTMENT
⁘ The capital investment index rose five points to 69, reaching pre-pandemic levels.
⁘ Most businesses either maintained (56%) or increased (41%) their level of expenditure on buildings, vehicles, and equipment.
⁘ Looking ahead to the next 12 months, the index is forecast to decrease by four points but remains within satisfactory levels.
CONSTRAINTS TO GROWTH
utility costs 20
DECARBONISATION
⁘ Two thirds of Central Highlands businesses (66%) are actively considering their corporate carbon footprint.
⁘ A majority (70%) of those businesses are engaging in energy optimisation activities, including energy conservation and transitioning to renewable sources such as solar power.
⁘ Businesses that have not considered decarbonisation reported that it was not a priority for them (40%), did not impact their business (28%), was cost prohibitive (28%), or they found the concept overwhelming (24%).
⁘ Labour shortages remain a key constraint as businesses continue to struggle to attract and retain staff.
overhead 57 64 64 65 0
⁘ The level of demand was reported as the most significant obstacle to business growth. Businesses are concerned that rising inflation and cost of goods and services will soften economic activity.
costs 80 (Index Score) Mar ’20 Jul’20 2021 2022 2023 2024 (Forecast)
% 40
indirect 60 68 69
34 % Energy optimisation Workflow adaptions Reduce supply chains impacts Understand supply chains impacts Develop carbon reduction strategy Implement carbon reduction strategy
ABOUT
The Central Highlands Business Survey is conducted by Central Highlands Development Corporation (CHDC) and serves as a key barometer of local business conditions. During the survey period from 2 May to 20 June, 179 businesses responded, representing 5% of the business community.
Congratulations to Inner Bean Hub, the winner of the Central Highlands Business Excellence Awards Gala Dinner tickets for completing the survey.
INDUSTRY SECTOR
15 %
Accommodation and food services
12 %
Retail trade
10 %
Health care and social assistance
BUSINESS SIZE LOCATION
8 %
Agriculture, forestry, and fishing
YOUR VOICE
Many of my customers are coming less frequently due to decreased disposable income that accompanies increased cost of living.”
Work demand has increased, while finding trained staff is near nonexistent. Attracting staff is difficult when there are so many choices for employment.”
My business has blown up more in the past 12 months than ever before!”
Increased revenue was due to consistent rainfall. I’m not sure if the coming year will be so kind.”
73% Emerald
6% Sapphire Gemfields
6% Springsure & Rolleston
4% Blackwater
4% Capella & Tieri
It has been a very trying year. Lack of staff and higher demand has made it hard to keep up and combat burn out.”
We have had an increase in operating costs and employment expenses, which has meant we have had to increase our margins to cover those increases.”
We relocated to a larger shop within Emerald and have expanded the business by adding equipment for additional services, thereby increasing revenue and expenses.”
Performed better than 2022 due to more exposure and tourists coming through.”
We are concerned by the indicators for recession and constant news of the cost-of-living crisis. People are stricter with their spending.”
People’s disposable incomes are dropping while everything involved in business is going up... gas... rent... electricity... wages etc.”
As there’s no housing, we are now buying houses so we can retain staff. We are desperate for more staff.”
I have employed a second practitioner which has increased my revenue and customers.”
