Roy Morgan Research (RMR) has released its business confidence survey for August, which registered a 2.5% decline over the month to be 14.8% below the peak recorded in October 2013 following the federal election, and 1.7% below the average of the last four years (see next chart).
The main factor dragging down business confidence was the decrease in the “proportion of businesses feeling that economic conditions in Australia would improve over the next year and five years”. There was also a decline in the “proportion of businesses feeling that they would be better off financially in 12 months’ time”.
However, despite the overall decline in confidence, the proportion of businesses believing that the next 12 months would be a good time to invest in growing their business remained unchanged at 57% – the equal highest since April 2014.
Reflecting the ongoing growth in the FIRE economy, “finance and insurance” (134.9) was the most confident sector followed by “rental, hiring and real estate services” (132.6).
Tasmania is the most confident state, followed by Queensland, South Australia, Western Australia, New South Wales and Victoria.
According to Norman Morris, Industry Communications Director at RMR:
“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 confidence in August, although the latest retail figures are likely to provide some encouragement.”
“The full impact of the Budget is yet to be seen with problems getting it passed by the Senate and compromises which are likely to reduce confidence in the government. Continued instability and uncertainty is not a good environment to make business decisions.”