Roy Morgan Research’s latest Business Confidence survey in February 2014 fell to 117.3, down from 131.5 in January, and back to below the level in August (119.6) 2013 in the month prior to the federal election. This negative result was across all business sizes as well as most states and industries. These February figures are the results of 1,343 interviews with all types of businesses across Australia.
The fall in confidence among business in February was caused by a decrease in positive feelings about where the economy is heading in the next 12 months and the next five years. This has resulted in a decrease in business intentions to invest in expansion over the next year.
February’s decrease in Business Confidence was greatest among micro business, down 14.9 points to 115.2, small business down 9.0 points to 131.0, but medium/large business were fairly steady (down 4.3 points to 143.9). Medium/large businesses (turnover $5m+ p.a.) have clearly been the most confident over the last three years and in February, they remain well above their three-year average.
All states except Tasmania have shown a decline in business confidence during February, with the biggest drop being in Vic, which fell to 115.8 (down from 134.3 in January). The other negative movers were Queensland (down 15.3 points to 118.6), New South Wales (down 14.3 points to 118.2) and South Australia (down 9.1 points to 124.4).
Over the last quarter, mining has remained the most confident sector (165.3), with the other industries well below, such as construction (135.1), manufacturing (120.6), retail (118.3) and agriculture (106.6). In the last month all of these industries have shown further declines.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
