Roy Morgan Business Confidence fell by 1.6pts (-1.4%) in December to end 2018 at 112.2 continuing a trend which has seen Business Confidence decline in six out of the last seven years in the final month of the year.
Business Confidence ended 2018 a significant 5.2pts below its level of a year ago in December 2017 and 3.9pts below its long-term average of 116.1…
Driving this month’s fall in Business Confidence was a decrease in perception about the performance of the business compared to a year ago with only 36.7% (down 5.6ppts), saying the business is ‘better off’ financially than this time last year (the lowest figure for this indicator since October 2016), compared to 29.4% (up 1.1ppts) that say the business is ‘worse off’ financially;
In addition respondents reported decreasing confidence about the performance of the business over the next 12 months with 43.8% (down 7.3ppts) expecting to be ‘better off’ financially this time next year and 18.7% (down 2.2ppts) now expecting to be ‘worse off’ financially;
Views on the short-term prospects for the Australian economy were little changed with 48.4% (down 0.2ppts) of businesses expecting ‘good times’ for the Australian economy over the next year and 41.0% (down 3.9ppts) expecting ‘bad times’;
However, longer-term views on the Australian economy have declined in December with 49.4% (down 2.4ppts) expecting ‘good times’ for the Australian economy over the next five years and 40.0% (down 1.9ppts) now expecting ‘bad times’;
There is good news however with a bare majority of businesses, now 50.5% (up 0.6ppts) saying the next 12 months will be a ‘good time to invest in growing the business’, while only 38.6% (down 0.3ppts) say it will be a ‘bad time to invest’…
Analysing the trends for Business Confidence by State shows the decrease in the December quarter reflected declines in the larger States of New South Wales, Victoria and Queensland joined by even steeper declines in Australia’s two smallest States of South Australia and Tasmania to drive the annual fall…
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.
