BUSI­NESS CON­FI­DENCE RE­COV­ERS

Business First - - NEWS -

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.”

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