Business confidence has fallen in the Orana and Far West region in the March quarter, with the region reporting some of the worst conditions in the state, a new survey shows.
Drought has again been identified as a major factor and there's a new call for all levels of government to "provide targeted measures to support our businesses".
Uncertainty about the federal election, including workplace relations, is also hurting confidence across the state, the NSW Business Chamber survey shows.
Western NSW Business Chamber regional manager Vicki Seccombe said it was no surprise the impact of the drought was a major factor.
"Respondents in our region are experiencing cash flow challenges and responding with reduced spending," she said.
"The Far West and Orana reported some of the worst business conditions in the state, with more than half of the businesses surveyed reporting deteriorating conditions, falling revenues and profits.
"As a result, about one-third of business across the Far West and Orana report cutting staff this quarter, while more than a third are expected to reduce staff the next quarter.
"There is an urgent need to help offset the devastation brought on by the drought.
"All levels of government need to provide targeted measures to support our businesses."
The survey accords with what Dubbo's Steve Fieldus is seeing on the ground.
The managing director of Transforce, which won the Gold Rhino business award in 2016, said the drought was having a massive impact on the rural economy.
It extended beyond farming to most businesses relying on the agricultural supply chain, he said.
"We're even seeing some smaller businesses close, which is sad news for regional towns and leads to loss of employment," he said.
Mr Fieldus was not surprised at the survey results showing one-third of businesses were cutting staff and that further cuts were slated.
"When things tighten, unfortunately in business you've got to manage your costs and reduce costs," he said.
Mr Fieldus "totally agreed" that governments needed to provide targeted measures to support regional businesses.
They were not getting tax breaks, subsidies or any benefits, he said.
The businessman highlighted the importance of solidarity.
"The most important thing is regional business will keep trying to support each other as much as possible to get through this period," Mr Fieldus said.