CONFIDENCE levels among rural business owners in South Australia have increased marginally, although consumer confidence has softened slightly in the country.
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The latest results of the BankSA State Monitor survey conducted in May found that business confidence was on the rise in the Mid North and Riverland, and in the Southern Region of the State which takes in Mt Gambier and surrounding areas.
Business owners in the North West region of SA, which includes the Eyre Peninsula and the areas in the north of the State such as Roxby Downs, recorded a small decrease in confidence, but remained the most confident in the State as the local economies reap the benefits of investment in mining projects and related infrastructure.
The BankSA State Monitor, which is conducted three times a year, showed that overall, business confidence in rural SA increased to 99.4 index points in May, compared with 96.3 index points in the last survey in February.
A neutral reading in the BankSA State Monitor is 100 index points.
Consumer confidence in rural SA decreased slightly to 101.0 points in May, compared with 103.2 index points in the February survey.
BankSA managing director Jane Kittel said that continued concerns about global financial markets and rising cost-of-living pressures were the main contributors to consumer-confidence levels declining marginally.
"There is still a lot of caution amongst consumers because of the impact of the renewed volatility in Europe as authorities try and find a solution to the large public sector debts in countries such as Greece and Spain,'' she said.
The small lift in business confidence was encouraging, with business owners generally believing that while economic conditions remained difficult they had been able to adjust to the tougher environment. However, the renewed volatility in Europe over the past two weeks might have had a further impact on confidence.
She said the long-term future for regional SA was strong, with billions of dollars being invested in the State on mining projects and related infrastructure, and the agricultural sector in solid shape.
"The $A has declined from its very high levels but historically still remains strong and this is adding to the cost pressures for exporters,'' she said.
On a region-by-region basis, the main findings of the May State Monitor were:
North & West
Business confidence decreased slightly in May to 104.0 index points, compared with 106.2 index points in February.
A total of 31 per cent of businesses in this region expect to make a major purchase in the next 12 months, down from 32pc in the February survey.
A total of 31pc of businesses had taken on additional employees recently, compared with 30pc in February.
Expectations about an improvement in the overall business climate moderated, with 38pc expecting an improvement, down from 48pc in February.
Consumer confidence in this region softened to 102.8 points in May from 109.4 index points in February.
A total of 31pc of consumers expect an improvement in the consumer spending climate, up from 27pc in February, while 29pc anticipate making a major purchase in the next three months, up from 14pc in February.
Mid-North & Riverland
Business confidence improved in May to 97.0 index points from 88.6 index points in February.
A total of 24pc of businesses expect to make a major purchase over the next 12 months, up from 17pc in February.
A total of 64pc of businesses feel positive about their current business situation, up from 56pc in February.
Consumer confidence in this region increased to 100.3 index points in May from 96.5 index points in February.
A total of 65pc of consumers feel positive about their current household situation, up from 58pc in February.
However, 21pc of people believe the consumer spending climate will improve in the next 12 months, down from 22pc in the previous survey in February.
Southern
Business confidence increased to 98.7 index points in May from 92.6 index points in February.
A total of 36pc of businesses expect the business climate to improve over the next 12 months, up from 28pc in February.
A total of 25pc of businesses took on additional employees recently, up from 22pc in February.
Consumer confidence in this region declined slightly to 98.9 index points from 102.4 index points in February.
A total of 40pc of consumers expect an improvement in the consumer spending climate in the next 12 months, up from 20pc in February, while 33pc believe there will be a positive financial change in their circumstances, up from 29pc in February.
