The Roy Morgan business confidence survey for April has been released with confidence soaring 5.9% after the federal budget cut petrol excise in half, but before the RBA’s decision to hike interest rates 0.25%:
There were improvements across the index, and an increasing majority of businesses, 54%, expect ‘good times’ for the Australian economy over the next year while a slim majority, 51.6%, say the next 12 months will be a ‘good time to invest in growing the business’.
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On a State-based level there were monthly increases in WA, up 19pts (+18.7%), Queensland, up 15.3pts (+15.5%), NSW, up 6.5pts (+5.7%) and a small increase in Victoria, up 0.9pts (+0.8%). The only exception was in SA, in which Business Confidence plunged 13.5pts (-12.4%) following the thumping election victory for the ALP, led by new Premier Peter Malinauskas, in late March.
Business Confidence in April 2022 is still below the long-term average of 113.7 but remains significantly higher than the latest ANZ-Roy Morgan Consumer Confidence of 90.7 for April 25 – May 1, 2022…
Accommodation & Food Services was clearly the most confident industry in March-April 2022 with Business Confidence soaring to 151.4, up a large 30.4pts (+25.1%) on a year ago. Accommodation & Food Services was one of only three industries to have higher Business Confidence now compared to a year ago…
Other confident industries with Business Confidence over 10pts higher than the national average included Wholesale on 128.9, but down 16.3pts (-11.2%) on a year ago, Agriculture on 124.2, down 20.1pts (-13.9%) on a year ago, Property & Business Services on 122.5, down 3.4pts (-2.7%) on a year ago and Administration & Support Services on 122.3, down 9.3pts (-7%) on a year ago.
There were however several laggards with Business Confidence well below the neutral level of 100 including Construction on 93.7, down 22.7pts (-19.5%) on a year ago, Recreation & Personal on 81.8, down 25.9pts (-24%) on a year ago and Electricity, gas & water on only 55, down 19.6pts (-26.3%) on a year ago.
The industry to suffer the largest decline in Business Confidence was Retail on 82.4, down 55.5pts (-40.2%) on a year ago – the largest percentage fall of any industry compared to early 2021. As concerns about inflation and rising interest rates continue to mount Retailers are facing the prospect of consumers tightening their spending after two years of stimulus-fueled ‘boom times’…
The RBA’s earlier and more aggressive monetary policy tightening should curb the enthusiasm and could deliver a solid fall next month.