Business confidence in the New England and North West (NENW) region improved this quarter, with local sentiment rising from -38.5 in Q2 to -29.2 in Q3, and expectations for the next quarter climbing to -2.1, close to neutral. While optimism is building, businesses say a “triple threat” of rising costs, access to skilled labour, and compliance burdens is holding back productivity and growth.
“Local operators are showing grit, confidence is edging back, but insurance, energy and government charges are biting hard, and persistent skill shortages mean many can’t capture opportunities even when demand returns,” said Diane Gray, Regional Director, Business NSW, NENW.
“If we want our region to make the change we want, with more jobs, investment and higher productivity, then we need practical relief on costs, faster planning decisions, and a reliable pipeline of skilled workers.”
Key findings for NENW
- Confidence trending up: NENW’s Business Confidence Index improved to -29.2 (Q3) from -38.5 (Q2). Expectations for Q4 are -2.1, signalling conditions are close to stabilising. Statewide, confidence rose to -40.0 in Q3 with -12.0 expected next quarter.
- Top cost pressures (NENW): Insurance, taxes/levies/other government charges, and Energy, followed by supplier costs, wages, transport, rent and loan repayments, mirroring statewide rankings.
- Productivity pinch (NSW-wide context): 97% of businesses face productivity challenges, led by business costs (65%), access to skilled labour (42%), and external regulations/compliance (41%).
- Hiring intentions (NSW-wide context): Despite recent headcount reductions by 25% of firms in the past three months, 84% plan to maintain or grow staff in the next quarter.
- Finance resilience (NSW-wide context): 57% could cover one month’s expenses via business banking facilities in August 2025 (up from 40% a year earlier), while 9% reported no viable options.
- Planning system feedback (NSW-wide context): Among businesses interacting with the NSW planning system in the past five years, only 6% rated their most recent experience as positive.
What NENW businesses need now
Business NSW – NENW is calling for:
- Insurance affordability action and targeted relief for regional risk profiles.
- Lower government-imposed costs (including reforms tied to state charges) to restore margins and unlock investment.
- Skills and housing solutions to attract and retain workers, so firms can scale when demand returns.
- Planning system improvements to reduce delays and uncertainty for regional projects.
“Our region is primed for growth, from advanced manufacturing to retail and professional services, but the cost stack and workforce bottlenecks are slowing the pace,” Ms Gray said. “Practical reforms will help NENW businesses choose their path with confidence to invest, hire and lift productivity.”
Media Release: Business NSW, NENW.
