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Far West stands out

Monday, 18th April, 2011

Agribusinesses in the Far West region have managed to avoid the worst impacts of adverse weather conditions experienced across the nation, according to a survey.

The sixteenth Westpac and Charles Sturt University (CSU) Agribusiness Index was released yesterday.

The survey, now in its fourth year, includes agricultural producers, their input suppliers and related transport, manufacturing, wholesale and retail businesses, which allows comparisons between regions along with state and national results.

Westpac Regional Manager, Scott Leis said agribusinesses in the Far West region decreased their capital expenditure to 0 compared with 0.05 for New South Wales and -0.01 across Australia.

"The national Survey results suggest that all sectors of Australian agribusiness slashed capital expenditure in the March quarter in response to floods in the east mainland states and drought in Western Australia," Mr Leis said.

"Although this brought down the overall economic performance of agribusiness across Australia, agribusinesses in general are confident about the longer-term prospects. 

"Agribusinesses in the Far West region showed decreased business confidence, with 91% being confident about their performance over the next 12 months, compared with 78% for the New South Wales and 76% of businesses nationally," he said.

After hitting the highest ever level in the last Survey, taken in September 2010, the economic performance of New South Wales agribusinesses fell back in all sectors and in most regions in the March 2011 quarter, Mr Leis said.

"The very strong result in September 2010 was a reflection of seasonal conditions which were the best seen in many years.

"Unfortunately, poor weather around harvest time hit grain quality which pulled the economic performance down.

"The good news is that capital spending by New South Wales agribusinesses was still positive in the quarter despite the fall," he said.

Westpac and CSU Agribusiness Index survey co-ordinator and CEO of CSU's Western Research Institute, Tom Murphy, noted that the Economic Performance Indicator (EPI) for the Far West region was +0.2 for the March quarter compared with a national result of +0.02 and a New South Wales average of +0.12.

The EPI ranges between -1 (worst result) and +1 (best result) based on the average of results for business performance, employment and investment indicators. A "satisfactory" result is when the EPI is zero.

"The economic performance of agribusinesses in the Far West region improved in this quarter, compared with a weakening for New South Wales and an improvement at the national level," Mr Murphy said.

"Looking ahead, Far West is expected to see another strong improvement in their performance in the June quarter," he said.

For a copy of the latest Westpac and Charles Sturt University Agribusiness Index, visit www.westpac.com.au/agribusiness.

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