09 May 2011

South Australian private businesses will transform short-term caution into longer term optimism, putting growth back at the top of the ‘to-do’ list, according to the ninth edition of PwC’s Private Business Barometer released this week.

PwC Private Clients Partner Michael Browne says the Barometer found nearly half (44%) of SA businesses are planning significant investments in the next year, well above the national average of 36% for the same one year timeframe.

“SA is a private business state and comparing past performance and future growth aspirations with other states, it tracks at average to slightly above average,” Michael says.

SA private businesses recorded a slight decline in sales growth over the past six months down from 10 to 8%. SA is just behind WA at 9% and ahead of the other states and territories surveyed which excluded Queensland.

Similarly, profit growth had dropped too over the same timeframe down by more than half from 19% to 8%.

Neither of these declines appears to have dampened the optimism of SA businesses, who predict short term sales and profits growth of 11% and 17% respectively. Longer term targets are for sales and profits growth of 20% and 21% respectively.

Comparing targets, the national expectations are sales and profits to grow by 13% and 17% respectively over the next 12 months with a jump to 23% in the longer term.

“SA businesses are setting themselves a big challenge made even tougher with the emphasis on organic growth as the number one means for achieving the bullish targets,” Michael says.

More than half (55%) expect to grow organically in the next 12 months with expansion into new products (39%) and new geographic markets (30%) are the other two popular means nominated for growth.