That is the word from the Illawarra Business Chamber following the NSW Business Chamber's business conditions survey done during the last three months of the financial year.

It revealed the upswing in business conditions expected following the recent elections did not occur.

Illawarra chamber executive director Adam Zarth said "I was a bit surprised but we have been hearing for a while now the retail sector reporting a downturn".

The survey showed there were several reasons for that. The ongoing impact of the drought was one factor continuing to affect businesses in the Shoalhaven and Southern Highlands. Another was a lack of available skilled workers.

Mr Zarth said if confidence remained low in the Shoalhaven and if businesses kept a freeze on their hiring unemployment would begin to rise again. But the chamber is concerned about further declines in economic activity throughout the whole region. And that could potentially result in a deterioration in labour market conditions.

"But a lot of effort is being put in by the business community with Federal and State Governments to get young people into paid employment in key areas of workforce shortages such as retail, hospitality, aged care and disability care".

Ms Zarth said each quarter the chamber asked businesses their perceptions on how the economy was performing and how they think the next quarter will play out. And he feels the results were a bit of a post election hangover which would end soon as people enjoy more money in their pockets following a drop in interest rates.

He said while he is hearing is that times are tough for businesses in the Illawarra, Shoalhaven and Southern Highlands there are signs of stabilisation.

While business confidence is the lowest in the state in the Shoalhaven and the Southern Highlands and employment of new staff is effectively on hold. The construction of a new bridge and ongoing road infrastructure further down the Princes Hwy will help turn that around.

Mr Zarth said the survey was done prior to both the RBA rate cut and the passage of the personal income tax package. Aware of that survey respondents did expect an upswing in the next quarter, particularly in retail.

"We are hoping for a bump in the next quarter but we are still using this as an opportunity to remind governments that investment in infrastructure has a stimulatory affect".

"Both state and federal governments should be investing in worthy infrastructure projects in regions such as ours to keep them and their economies moving".

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