The public are being urged to get out and support their local businesses following a forecast 11% average drop in Christmas trade across NSW.

A survey of businesses from across the state released in the latest Business Conditions Survey has revealed 61% of businesses are expecting Christmas trade to be down compared to last year, with only 17% anticipating an uptick.

Business NSW CEO Daniel Hunter encourages us to “get out there and support our local business through what will be a tough Christmas for our communities”.

“The state’s business community needs to capitalise on Christmas but tell us that this latest interest rate rise means less foot traffic, less sales and less contracts coming through the door,” Mr Hunter said.

“Members are telling us the most recent interest rate hike from the Reserve Bank has hit business confidence, but there is hope.”  

Despite the downbeat sales predictions, the headline Business Confidence Index has improved to -57.6 in the last quarter of 2023, the highest reading in three quarters.

In addition, the majority of NSW businesses are predicting that they will maintain their workforce headcount for the next quarter, and also forecast that Business Confidence will continue to rise.

“We applaud the NSW Government for introducing business measures to help in these tough times for those with loans, including changes to procurement rules, moves to scrap the Emergency Services Levy and energy support to small and medium business,” Mr Hunter said. 

“The focus on providing affordable housing in the right place for key workers will take a time to feed through but is a big step in the right direction for our members whose staff are struggling to pay their rent.

“We are very concerned that the recent interest rate rises also come at a time when the Federal Government is proposing industrial relations changes which will further increase the cost of doing business.”

The survey also revealed insurance, rental costs and energy - followed by taxes, levies and government charges – remain the top cost concerns for businesses.

Key findings:

• Christmas trading is expected to fall on average 11% this year compared to last year; 
• Sydney business are expecting an average 4% downturn from a year ago while their regional counterparts are expecting a sharper decline of 13%; 
• Most businesses (63%) intend to maintain the same staff headcount for the next three months; 
• Headline Business Confidence Index has improved to -57.6 in the last quarter of 2023, the highest reading in three quarters. However, businesses that completed the survey after the November 7 rate hike had a confidence level of -66.2, notably lower than the confidence level of -52.1 for those who submitted their survey responses beforehand;  
• Business insurance has been the number one issue for business in 10 of the past 16 Business Conditions Surveys since December 2019; 
• 87% of businesses would love to expand their business operations, except they are constrained by a range of barriers such as the cost of doing business and skills shortages; and
• Construction and manufacturing businesses are expecting the worst continued downturns, while those in the transport, postal and warehousing and information media and telecommunications sectors are expecting to be relatively more resilient.