Petrol prices hit the tourism industry: Economy roundup

Soaring petrol prices are putting the squeeze on tourism businesses, a new survey released today shows.

The Victoria Tourism Industry Council survey reveals tourism operators in the state saw petrol prices as the single biggest factor constraining the growth of their businesses in the May 2008 quarter.

Petrol prices – which passed the $1.70 mark in some parts of the country today – were identified as a significant restraint by 60% of tourism business owners, up from 41% in the preceding quarter.

Tourism businesses were also much less positive about their longer term prospects, with only 32% of those surveyed indicating that they anticipate their business performance will improve over the next year, down from 42% in the first quarter of this year.

And tourism operators aren’t the only businesses suffering because of high petrol and oil prices. According to the Westpac–ACCI Survey of Industrial Trends, higher fuel costs helped drive average unit production costs through the roof in the May 2008 quarter and now approach 60% of net revenue.

The key industrial trends actual composite index fell to 53.9 from 56.0, again pointing to slowing economic conditions as high interest rates bite.

On the markets today, the S&P/ASX200 is down 1.1% on yesterday’s close to 5384.2 at 12.20pm, with concerns about oil prices and the health of the US economy driving selling across financial and transport stocks. At the same time the dollar is trading US94.66c.