There is always a significant period between the announcement of a budget at any level and the reveal of its full impacts, as policies are introduced and financial trickle-down effects occur. However, impacts on confidence among consumers and business can still be seen immediately after a budget release.
In the recent Queensland state budget, infrastructure announcements to support up to 27,500 jobs were brought forth, and this has been immediately recorded in confidence levels for business. But which was has it gone, and how could this change the outlook for commercial property on the Gold Coast?
The Westpac Group and Chamber of Commerce and Industry Queensland (CCIQ) Pulse Survey of Business Conditions for the June quarter has been released, and it has shown significant positive progression since the March quarter report.
"Confidence in the Queensland economy has improved on the back of a balanced State Budget delivered on July 14," said Nick Behrens, director of advocacy with the CCIQ.
"Businesses have responded positively to a state budget that provided more clarity on economic and fiscal policy direction."
This has come around as a result of both state and federal budgets that held good measures for businesses across the state. The survey took measures of confidence both before and after the state budget, and uncovered a six per cent boost for confidence following the state government's announcement. In particular, the increase in confidence was for the economic outlook of the Sunshine State for the coming 12 months.
Mr Behrens did warn, however, that this correction did not mean the overall conditions were overwhelmingly positive. Regardless, this is a good step for businesses to take. Anyone interested in renewing their industrial leasing on the Gold Coast might take heart from this result.
While lower than confidence recorded 12 months ago, the survey found that confidence in the state economy went up to an index level of 42.7, while faith in the national economic status rose to 48.1. Meanwhile, profitability rose to 43.5 and general business conditions sit at 43.0.
It should be noted that while this is an overall improvement, a rating of below 50 indicates negative conditions, so there is some way to go for many business operators, likely including those on the Gold Coast.
Meanwhile, sales and revenue ended the quarter in positive territory at 50.8. This suggests those who run businesses out of commercial property on the Gold Coast are experiencing solid cashflow at the moment. Moreover, capital expenditure reached an index rating of 47.7. This is the highest this indicator has been in seven years.
Employment also rose, which could be due to the strong jobs announcement from the state budget. The 27,500 jobs from the budget are for capital works and infrastructure, which may have incredibly positive flow-on impacts for commercial property on the Gold Coast. Good transport links and public facilities are sound signifiers of growth areas.
The cost of wages, political and economic stability and economic demand were identified by Mr Behrens as the main factors holding back business confidence.
Unfortunately, right now business confidence on the Gold Coast is the second lowest in the state. However, given steady increases in real estate value there may still be sound potential for further capital gains from the purchase of commercial property on the Gold Coast.
If you are interested in furthering your company or opening up a new branch on the Gold Coast, or perhaps making an investment in office real estate, make sure to get in touch with Ray White Surfers Paradise. We specialise in matching clients with their ideal real estate.