Economic recovery stalls in Australia's New South Wales

Economic recovery has stalled in New South Wales (NSW) of Australia as businesses face rising strain from a record high Australian dollar, a quarterly business survey by NSW Business Chamber and Commonwealth Bank of Australia showed on Tuesday.

NSW Business Chamber and Commonwealth Bank Business Conditions index for March fell to -0.7 index points, down from 0.8 index points in November 2010.

The index was last below the zero level that separates expansion from contraction in July 2010, when it was -5.9 index points.

"Sales are flat-lining, profits are falling, exports are languishing with business conditions deteriorating over the past year," NSW Business Chamber Chief Executive Officer Stephen Cartwright said in a statement on Tuesday.

"The high price of the Australian dollar, driven by the resources boom, is having a dramatic impact on our manufacturing and services sectors," he said.

The survey found sales revenue, profits and export sales were in negative territory in March.

The survey showed skills shortages were also a significant problem for businesses in NSW, with 46.8 percent of businesses finding it hard to find skilled employees.

This compares to November 2010, when 39 percent of businesses reported skills shortages.

Commonwealth Bank chief economist Michael Blythe said while sales outcomes deteriorated in the March survey, resource rich regions of NSW experienced a rise in conditions.

"The trend in export sales has improved, despite the erosion of competitiveness stemming from the rise in the Australian dollar to new record highs," he said in a statement.

The survey also showed 32.5 percent of the 1080 respondents believed business conditions would be stronger over the next three months, while 43.9 percent expected them to be the same.

Source: Xinhua

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