Victoria, Australia: According to the latest VECCI-Commonwealth Bank Survey of Business Trends and Prospects, regional business conditions softened further over the three months to June 2010, but continued to hold up relatively well compared to the experience of metropolitan businesses.

Whereas lower selling prices contributed to a more prominent decline in profitability for metropolitan businesses, regional businesses reported a small increase in selling prices.

• Over the June quarter, the relative strength of business indicators was quite similar across metropolitan and regional respondents. In particular, both metropolitan and regional respondents reported moderate net growth in sales and employment, together with widespread growth in wages and other labour costs. Regional businesses reported stronger growth in plant and equipment investment.
• With regard to the outlook for the Victorian economy, 29 per cent of metropolitan businesses and 27 per cent of regional businesses expect stronger economic conditions over the coming year.
• VECCI CEO Wayne Kayler-Thomson said the increasing pressure on labour costs, combined with the slow economic recovery and ongoing caution among businesses is cause for note among decision makers, including the Reserve Bank and its decision on interest rate settings.
• “It is important that governments continue to reduce costs on business and give priority to ongoing regulatory reform,” Mr Kayler-Thomson said.

Source: http://www.vecci.org.au/news/Pages/Regional_business_conditions_soften.aspx