The Business Conditions Survey for the September quarter shows that the trading conditions flowed on from the 85.7 per cent of the regions’ businesses that reported being impacted by the drought in August.

Out of six key indicators in the survey – view of the NSW economy’s performance, capital spending, operating costs, sales revenue, profit and staff numbers – only two showed improvements between June and September.

Sales revenue and capital spending dropped by 6.6 and 23.2 index points, respectively. Staff numbers also dropped slightly.

Businesses’ view of the state economy remained neutral and operating cost reductions were realised, with a gain of 2.2 and 14.7 index points, respectively.

Despite the hits to revenues and capital spending, business confidences in the Murray and Riverina region above average.

Both regions were second and third, respectively, for the quarter – behind the Newcastle and Lake Macquarie region.

Hayley West, Magpies Nest Restaurant manager, said that while business “has been good, we are not seeing as many corporate events as we have in previous years”.

“Especially from the agriculture sector,” Ms West said.

In reducing operating costs, she said they had implemented initiatives.

“We have just installed an additional 15 kilowatts of solar panels and added battery storage to be 90pc off grid,” Ms West said.

“We are hoping that this will help to future proof this aspect of the business with rising energy costs.”

For both the Murray Riverina, the unemployment and youth unemployment rates were 7.4pc and 17.1pc, respectively.

Ms West said hiring and retaining staff was one of hospitality’s challenges.

“We are always on the lookout for enthusiastic hospitality professionals,” she said.

“However, we are finding that the good ones don’t stay long in Wagga; rather, they move to the cities where there is more hospitality culture.

“Retaining staff in this sector is always a tricky one – the majority of our workforce being university students, so it’s a swinging door of staff coming and going.”

However, looking to the next quarter, five of the six indicators are expected to gain improvements.

Profit is set to be the biggest winner, going from -6.4 to 7 index points.

Richard Pottie, managing director of Ladex Construction Group in Bomen, participated in the NSWBC survey and said diversification was key to ensuring business stability and growth.

”You’ve got to be multi-disciplined – you can’t just focus on one area as we’ve done for the last 25 years,” Mr Pottie said.

“I think the level of confidence is generally good.”

Andrew Cottrill, NSW Business Chamber regional manager for the Murray and Riverina, said that “lower levels of capital spending this quarter show businesses are tightening their belts and delaying major spending decisions”.

“Compounding the state’s sluggish quarter are a downward trend in revenue, which has dried up capital spending and employment growth,” Mr Cottrill said.

“Despite this, business confidence in the Riverina and Murray regions remains above average as business owners look to improved conditions as we move through Spring.”

Mr Cottrill called on governments do do more.

“We need to see a stronger commitment for affordable energy, drought-focused support services that assist businesses – like ATO payment plans to assist tax obligations in drought stricken areas – and a renewed focus on delivering skills training for our young people,” he said.

“From a State Government standpoint, focus needs to remain on delivering the infrastructure spending (especially in rural and regional NSW) to make sure that our economy goes from strength-to-strength.

“While many members of our business community are being rocked by factors beyond their control, the Government has the ability to stimulate an even stronger economy.”

Regional recap: September 2018

NSW Business Conditions: September 2018

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