Rural businesses experience confidence lift

They survey, conducted during February, shows statewide business confidence in regional areas was up seven points, from 102.3 to 109.3.

Regional consumer confidence remained largely unchanged, with a slight decrease from 92.1 to 92 points - still well below the 100-point baseline.

Businesses across all regions reported greater confidence in the climate for doing business and their own business performance during the next 12 months, as well as a greater likelihood of making a major purchase in the coming months.

While consumers remain more subdued, across all regions they indicated a higher intention to make a major purchase in the coming three months.

BankSA chief executive Nick Reade said the results for regional SA indicated the mood among businesses was more buoyant.

"Mood is an important part of the South Australian psyche and a strong indicator of how well our state is doing, so it is pleasing to see businesses across all regions reporting increased confidence in outlook for the coming 12 months, in addition to feeling more positive about their own situation," he said.

"While regional consumers remain less confident, it is encouraging that across the state people are indicating a greater intention to spend over the coming few months, which in turn will provide an added for businesses in these communities."

The Mid North and Riverland regions, which includes the Barossa, Riverland and Yorke Peninsula, recorded the largest increase of all regions, from 94 points to 105.1.

The region also saw a marginal increase in consumer confidence, increasing 0.5 points from 90.5 to 91.0 to end three consecutive declines and make it the second most confident region.

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The monitor also showed the West and North (Upper Spencer Gulf, Far North and Eyre Peninsula) experienced a decrease in consumer confidence - down 15.2 points from 91.3 to 76.1, which was the region's lowest confidence level ever reported - and a reversal of recent surveys with a small increase in business confidence - up 0.8 points from 104.4 to 105.2.

Southern (South Coast, South East, Hills and Murray Plains) had an increase in consumer confidence - up 9.7 points from 93.6 to 103.3, which extends its position as the most confident rural region for the past three surveys. It also reported an increase in business confidence - up 4.5 points from 109.0 to 113.5 - the most confident rural region for the past nine surveys.

The monitoring was conducted in early February - coinciding with growing global uncertainty about the spread of coronavirus and in the aftermath of the bushfires which significantly impacted Kangaroo Island and the Adelaide Hills.

Overall, when combining metropolitan and regional results, the BankSA State Monitor shows that business confidence increased to reverse four consecutive declines, lifting 10.2 points to 115.4 points - the most positive result in 12 months.

Consumer confidence also lifted 6.1 points between October and February, increasing from 95.2 to 101.3, reversing a declining trend in the past 18 months and returning to positive territory.