Survey reveals access to finance is blocking economic recovery

“These figures show that the financial crisis is far from over. More must be done to assist businesses in obtaining the finance they need to operate,” said Kevin MacDonald, CEO of NSW Business Chamber.

“The flow of credit is the lifeblood of the economy. Businesses across the state are being denied the credit they need to pay employees and suppliers.

The survey canvassed the opinion of over 440 small to medium sized business across metropolitan and regional NSW.

 MacDonald said that despite the massive reduction in the cash rate by the Reserve Bank, a staggering 55 per cent of businesses said that the cost of finance had remained the same over the past three months.

In other results, the survey revealed that 66 per cent of businesses believed that the NSW economy had weakened over the previous three months with 46 per cent of businesses reporting that business conditions had deteriorated.

“With nearly one in every two businesses reporting deteriorating business conditions the need for us to kick-start the NSW economy has never been more urgent.”

The global financial crisis was hitting employment prospects hard with twice as many businesses expecting to reduce employee numbers (24.3 per cent) than increase staff (9.2 per cent) over the next three months.

Further, one in four businesses (25 per cent) reported a decrease in the number of hours their employees were working.

“Many employers are loyal to their employees and are doing their hardest to keep their staff on by altering work practices and reducing hours but it’s an uphill battle in this economic environment.” MacDonald concluded.