Director Sentiment remains in negative territory amid concerns over deteriorating business conditions | Director Sentiment Index 1H23

Inflation and rising interest rates are the top economic challenges facing Australian businesses, according to the latest Director Sentiment survey.

Fifty-six per cent of the directors surveyed for the First Half 2023 Director Sentiment Index (DSI) said inflation and rising interest rates were their top concern, followed by skills shortages (52%) and the cost of living (33%).  
 
The survey points to mounting concerns over deteriorating business conditions with directors anticipating a further weakening in the economic outlook over the next year. 
 
While overall director sentiment has picked up slightly on the previous survey, it remains in negative territory at -6.1 compared with -8.5 in the second half of last year. 
 
The lift in director sentiment was largely due to a stronger assessment of the global economic outlook, particularly China. 

AICD Managing Director and CEO Mark Rigotti said it was clear that business is conscious of the challenging economic environment and is rightly looking to ways of dealing with a protracted period of volatility. 
 
“The skills shortage has not disappeared and it’s increasingly important that policies are not only focused on the immediate challenges but also on positioning Australia for the longer term, with directors looking for a boost to education, innovation and research and development.”

-Mark Rigotti MAICD, CEO AICD