Businesses confidence levels in regional Western Australia have surged to their highest level in three years, with more businesses reporting an optimistic outlook in the short and longer term.
CCIWA’s Regional Pulse report for the September quarter found two in five (41%) regional businesses expect economic conditions to improve in the next three months – an increase of five percentage points from the previous quarter.
WA’s regional areas are showing business confidence levels on par with those in the Perth metro area for the first time since December 2022.
CCIWA Chief Economist, Aaron Morey, said the surge in confidence in regional WA is likely driven by strong exports.
“We’ve seen surging commodity prices and good harvest conditions over the course of 2025, and that’s likely what’s driving business confidence across the regions,” he said. “WA’s economy is in good shape and that’s flowing through to businesses.
South West
The South West has recorded the third highest confidence level over the next quarter across regional WA. Almost half (45%) of businesses expecting stronger economic
conditions compared to the current quarter - an improvement of six percentage points. While this number falls slightly to two in five (39%) over expectations for the next twelve months, businesses in the South West still remain more optimistic compared to the regional average of 32%.
Increased optimism in the South West is being driven by an improvement in the barriers to growth. According to the previous quarter’s survey results, the top three barriers to growth were rising operating costs (72%), labour shortages (63%), and a lack of housing for workers (46%). The data from this quarter’s survey reveals that while businesses are still being impacted by the same top three barriers to growth, conditions have improved over the quarter. Rising operating costs (64%, down six percentage points), labour shortages (46%, down 17 percentage points), a lack of housing for workers (19%, down 27 percentage points) have all contributed to optimism in the region.
Businesses in the South West are also expecting greater economic activity contributing to greater optimism. More than half (51%) of businesses are expecting greater production, while just under half (49%) are expecting to hire more staff. Labour costs are also expected to improve, with seven in ten (70%) expecting costs to increase. While this represents an improvement of 5 percentage points over the June quarter, this number still remains high. The labour market is expected to remain tight well into 2026 which will continue to put pressure on labour costs to rise.
This is in line with a greater proportion reporting a number of key barriers compared with last quarter, including rising operating costs (72%, up seven percentage points), labour shortages (63%, up 16 percentage points), a lack of housing for workers (46%, up 23 percentage points) and international trade tensions (20%, up eight percentage points).
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