BUSINESS CONFIDENCE RECOVERS
Roy Morgan Research’s latest Business Confidence survey in March 2014 shows that Australian Business Confidence rose during the month, partially offsetting a steep decline in confidence during February. An increase of 3.3 points from February to a score of 120.6 puts Business Confidence back above the level that immediately preceded the last federal election in August 2013, when Business Confidence rated only 119.6. These figures are the result of 1,511 interviews with business across all industries, sizes and locations around Australia.
The modest recovery in Business Confidence was driven by an increasing proportion of businesses reporting that their financial position compared to 12 months ago has improved (up 4.5 points to 32.6%), and a return of confidence in the economic outlook for Australia in the next 5 years (up 2.4 points to 64.5%). There was also a sharp increase in the belief that the next 12 months will be a good time to invest in growing a business (up 3.8 points to 59.7%). However these improving expectations are offset with concern for individual businesses, with the proportion of businesses expecting to be better off financially 12 months from now declining 2.2 points to 37.7% of Australian businesses.
Nigel Smith, director of Business Research, Roy Morgan Research, says: “The resilience of Business Confidence in March 2014 appears to largely reflect the strength of the Finance and Real Estate industries, particularly in Victoria. Recent figures showing a surge in new dwelling approvals for the Melbourne CBD is most likely driving this, although the Construction industry in the state appears to have only moderately benefited from this strength.
“With the exception of the Mining industry, it is notable that between 2011 and 2014 the industry that has consistently shown the highest Business Confidence is the Finance & Insurance industry – corresponding a period of historically low interest rates in Australia. If Australian interest rates do rise in 2014, Business Confidence in this industry is likely to suffer a setback.”