Confidence in the long-term economy has dropped to its lowest ebb since the global financial crisis as employers struggle with the rising cost of doing business in WA, according to a prominent survey.
The Commonwealth Bank-Chamber of Commerce and Industry survey of business expectations shows nearly half of those surveyed - 45 per cent - expect economic conditions to deteriorate over the next year. Only 13 per cent believe they will improve.
In the short-term, nearly a quarter of businesses surveyed expect conditions will worsen in the first quarter of this year, compared to a fifth who think it will get better.
CCI chief economist John Nicolaou said the pessimism was because of continuing economic uncertainty, in particular the deferral of some mining projects in WA, which had proved more detrimental to confidence than the threat of the eurozone break-up in the first half of last year.
"The uncertainty is multifaceted but (is) mostly from a combination of global and domestic economic uncertainty, which has spooked many businesses over the second half of last year," Mr Nicolaou said.
"That has been amplified when combined with the high cost of doing business.
"Businesses . . . are looking to find some relief if they are to remain competitive in what is a more competitive global economic environment."
The survey showed labour issues, particularly rising wages, were a concern and a major cost of doing business.
Owner of Temptation, The Romance Bookstore in Subiaco, Christina Tanuadji, said she and her business partner were considering closing down their store because they expected conditions would deteriorate this year.
While the expectant mother said growing family was also an issue for both women, they were worried about competing with online book retailers. Her online competitors, mostly based abroad, could offer products at lower prices, partly as a result of the strong Australian dollar and because they did not have to sustain WA's rising business costs.
Increasingly expensive overheads included wages, utility bills, rent and insurances. The fortunes of the store were linked to the US economy, because the contraction in the American publishing sector restricted the books on offer.
"We have to sell three books for every one book sold by an online retailer, just to keep up," she said.Businesses . . . are looking to find some relief if they are to remain competitive in a global economic environment." CCI's John Nicolaou
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