Roy Morgan business confidence lifts in September

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By Leith van Onselen

Roy Morgan Research (RMR) has released its business confidence survey for September, which registered a 6.8 point (5.9%) rise over the month to be 9.8% below the peak recorded in October 2013 following the federal election, but above the average of the last four years (see next chart).

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The proportion of firms believing the next 12 months would be a good time to invest in growing their business rose to 61%, up from 57% in August and is now at the highest level since January 2014.

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Reflecting the ongoing growth in the FIRE economy, “finance and insurance” (138.1) remained the most confident sector followed by “rental, hiring and real estate services” (135.9).

Tasmania is the most confident state, followed by Western Australia, Queensland, Victoria, South Australia, and New South Wales.

According to Norman Morris, Industry Communications Director at RMR:

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The improvement in business confidence in September was due largely to the increase in optimism about the next 12 months for the Australian economy and the positive impact that this would have on the financial position of businesses.

“This improved outlook was a result of a number of factors, including issues relating to the budget going relatively quiet due to an increased focus on international events and the blocking by the senate of a number of major changes. Other positive impacts were interest rates being kept low, house prices continuing to rise and unemployment remaining unchanged.

“Confidence in the key areas of retail, construction and manufacturing, which were seen as making up for a slowdown in the mining industry all remain below average in September although the construction industry is showing tentative signs of improvement in outlook.

“The worsening budget position is likely to begin impacting on business confidence as is the declining stock market and the difficulty of getting a number of key measures passed by the Senate which is likely to lead to a new revised budget.”

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.