The Premier, Lara Giddings, today acknowledged conditions in the Tasmanian economy remain tough but repeated the importance of maintaining confidence in the future. 

Ms Giddings said State Final Demand showed the Tasmanian economy shrank in the June quarter, partly off the back of a wind-down of stimulus measures and government spending. 

"Of course these figures are disappointing and they show that we must continue to support private investment and jobs," Ms Giddings said. 

"I have never shied away from the challenges confronting the Tasmanian economy. 

"However, it is vitally important that we work to grow confidence among consumers and the business community. 

"If businesses are not confident they will not invest, without investment they cannot create jobs a without jobs consumers stop spending.

"When I talk about the importance of confidence I am not denying the very real challenges facing our economy, in fact confidence is the key to our recovery. 

"That is why I was encouraged by this week's Sensis Business Index which shows Tasmanian businesses are the most confident in the country. 

"That confidence was demonstrated yesterday with construction starting on the $25 million Bunnings Warehouse at Burnie, which will create 250 construction and full time jobs.

"Even today's figures show a 2.5 per cent increase in exports over the past year and $1 billion worth of private investment in the last quarter."

Ms Giddings said the Liberal Opposition was helping no one with their relentless negativity. 

"Yesterday the Liberals flatly rejected the Sensis Index and yet they have gleefully seized on today's figures. 

"This shows the Liberals pick and choose the evidence that suits their own political ends. 

"While today's figures clearly show we have faced challenges over the past year, importantly the Sensis Index found 53 per cent of respondents are expecting a better 12 months ahead. 

"While the Liberals want to look backwards, we have our eyes firmly on the future. 

"The Liberals should do Tasmania a favour and cease their relentless negativity and work with us to help grow confidence in the economy."