NSW businesses are grappling with steep insurance hikes, workforce challenges, and global turmoil according to Business NSW’s latest Business Conditions Survey.

The Business Confidence Index fell to -50.8, slightly worse than the previous quarter of -44.7. Despite the dip, it remains the second highest reading since April 2022. Confidence for the next quarter is stronger with a reading of -29.0.

CEO Dan Hunter said small and medium businesses are under immense pressure.

"Rising insurance and wage costs, skills shortages, a broken workers’ compensation system, the AI revolution and an outdated tax system which disincentivises investment and entrepreneurship all weigh heavily on businesses,” Mr Hunter said.

“The US “Liberation Day” tariffs announced on 2 April have rattled global financial markets and shaken business confidence.

“Many members have told us the tariffs have forced them to reassess supply chains and international exposures.

“Following the 3 May federal election, the Albanese Government returned with a thumping majority. It remains to be seen whether it can deliver the ‘golden triangle’ of productivity growth: low taxes, labour flexibility and affordable, reliable energy.”

Key findings from the survey include:

• Insurance is the top cost concern, with over one-third of businesses facing price hikes of more than 30% in the past year.
• A proposed 36% hike in workers' comp premiums would see 45% of businesses cut staff and one in five say they may not survive.
• Nearly one in four businesses using gas, coal or diesel are struggling to electrify operations, primarily due to capital costs.
• 27% of businesses have cut staff in the past three months.
• Economic uncertainty is impacting demand and supply, with 75% of small businesses already feeling the pinch or bracing for impact.
• 64% of businesses report disruptions from changing supplier behaviour.
• US tariffs have prompted many small businesses to review supply chains and focus more on local markets.

Mr Hunter said workers’ compensation and insurance reform were urgently needed to ease financial pressure on businesses.

“To tackle soaring insurance costs, the NSW Government must fast-track reforms to the Emergency Services Levy, which adds nearly a quarter to premiums. This would provide vital relief to thousands of businesses struggling to stay afloat.

“Passing the workers’ compensation reforms through NSW Parliament next week will also help ease the cost burden on businesses.”

About Business NSW

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826. We represent almost 50,000 businesses.

MEDIA CONTACT: BEN PIKE – 0429 993 822