The Limestone Coast continues to grapple with the cost of living crisis, with people feeling the pinch throughout the region.

Mount Gambier Chamber of Commerce vice president Michael Kosch spoke to The SE Voice regarding tourism, local businesses and how cost of living increases were making an impact.

“Tourism and the visitor economy is holding out quite well compared to pre-COVID I think we had such a strong bump throughout the last 18 months really, and we really drove the sales much higher than we have experienced prior,” Mr Kosch said.

“We are also dealing with the change in the economy particularly with interest rates and inflation, which is starting to affect household income and spending.

“So, we feel like we are starting to see the effects of that flow through into accommodation.”

“The leisure or ‘staycation’ market is starting to soften a little bit, that is something that is across the country and across the world, and it is the winter seasonality, that is a fairly normal thing in Mount Gambier,” Mr Koch said.

“But you can certainly see there are probably just a few less people poking around on the weekends than there was perhaps during the winter months last year.”

Mr Kosch said due to cost of living increases, people were more cautious about their spending habits.

“People going to restaurants and retail, other non-crucial spending items, they are probably the things that households are starting to question and perhaps cut back on a little bit,” he said.

“There has been a lot of commentary in media around the mortgage cliff or the finishing of a lot of peoples’ fixed-rate mortgages, with a lot of those falling due in September and October, so peoples’ cost of their mortgages and their loans is going to increase significantly following that point.

“Again, that is a significant adjustment to the way people’s households will operate.”

Mr Kosch said local businesses were faring well; however, everyone was somewhat nervous about what was around the corner.

“I think that is pretty normal just with the bit of a change in trading conditions and living conditions as people adjust their household budgets and they are also looking to cope with higher mortgage prices and everything being more expensive than normal,” he said.

“That winter softening is certainly not back to pre-COVID levels, trading conditions are certainly better than what they were, say, in June 2019.

“But I think it is those economic headwinds and the uncertainty around what might happen in the second half of the year.”

Mr Kosch suspected the change in consumer spending and trading down would continue, however hoped interest rates forecasted to decrease later in the year and into next year would help stabilise this.

Mr Kosch said it was great to see a fairly constant stream of new business openings in Mount Gambier’s main street.

“I feel like the competitive business environment, there is a bit more in it than there once was, and that is a good thing because it gives consumers a bit of variety,” he said.

“Consumers and customers are more discerning in what they like and what they look for more than ever and people have got options.

“Corporate business is (also) holding up really well, and I think that tells a story of a lot of the investment and reinvestment that is going on around the South East through forestry and other industries that really do a lot of work at the moment.

“I think that tells a good story for the local economy including accommodation and tourism providers as well.

“I anticipate that that will remain a strong segment of the overall accommodation and visitor business for the balance of the year while some of those larger projects are run out and they are completed.”

Mr Kosch said cost of living was also impacting businesses, with increased power and gas prices, a 5.75% increase to the award wage and increased superannuation guarantee rate from 10.5 to 11%.

Mr Kosch said the region also continued to face a local workforce shortage.

“Unemployment still remains very low, which means people are employed and perhaps a little bit more selective about the sort of work they do,” he said.

“That does create challenges for businesses who are trying to attract and retain skilled employees and deliver on their service promises and the customer experience people

want.

“It is very, very difficult to employ appropriately skilled, quality staff.”