RBA rate rise ratchets up the cost pressures for Canberra business
The Canberra Business Chamber says that the Reserve Bank’s decision today to raise the cash rate for the first time in more than a decade is a reminder that the cost of doing business is increasing along with the cost of living.
Chamber CEO Graham Catt said: “While the focus for business has shifted from economic survival to economic recovery, Canberra’s small business operators are struggling with workforce shortages and rising costs, leaving them with a difficult choice between raising prices or absorbing higher costs with already thin margins.”
The latest ABS data showed that of the 31,500 businesses actively trading in the ACT, 87 per cent are small or “micro” enterprises.
According to recently released ABS data, 57 per cent of all businesses have had the cost of doing business increase more than usual over the last three months.
“Supply chains were affected by the pandemic, and those disruptions have been further exacerbated by the conflict in Europe and lockdowns in China. That’s driving up the cost of everything from whitegoods to semiconductors, and small businesses are bearing the brunt of these disruptions.”
“On top of that, businesses are also dealing with the worst labour and skills shortages in almost 50 years. The RBA has forecast that the unemployment rate will further decline to around 3.5 per cent by early 2023, stretching an already tight labour market.”
Our economic recovery will be driven by the private sector and in the ACT that means our small and medium businesses will be doing the heavy lifting,” Mr Catt said.
“Both the Federal and Territory governments need to be pulling every lever they can to address the supply side constraints that are a handbrake on the economy and helping businesses to grow.”
Graham Catt, CEO, Canberra Business Chamber T: 02 6247 4199