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Business Confidence was up in April before the Federal Budget

Source: Roy Morgan Business Single Source (Australia), December 2010-April 2017. Average monthly sample over the last 12 months =1,012.
Business Confidence in Australia rose 2.8pts (+2.5%) to 116.6 in April, according to the Roy Morgan Business Single Source survey. The rise in Business Confidence coincided with the Australian All Ordinaries gaining 43.8pts (+0.7%) to 5,947.60 during the month and strong near record monthly trade surpluses of over $3 billion in the months leading into April.

The increase in Business Confidence came before last week’s Federal Budget which appeared to have a negative impact on Consumer Confidence – the ANZ-Roy Morgan Consumer Confidence Rating fell 2.6% to 109.4 following the Budget.

Monthly Business Confidence -- Australia

Roy Morgan Business Confidence - April 2017 - 116,6
Source: Roy Morgan Business Single Source (Australia), December 2010-April 2017. Average monthly sample over the last 12 months =1,012.


Improving views of the year ahead boost Business Confidence

Business Confidence was boosted in April by improving sentiment about the year ahead – both for companies and the wider Australian economy.

  • In April 48.7% (up2.7ppts) of Australian businesses expected to be ‘better off’ financially this time next year compared to 19.7% (down 0.4ppts) that expected to be ‘worse off’.

  • In addition a majority of Australian businesses, 52.8% (up 2.7ppts), expected ‘good times’ for the Australian economy over the next 12 months while 40.0% (down 6.1ppts), expected ‘bad times’ – a net positive gain of a significant 8.8ppts.

  • Over half of Australian businesses, 54.2% (up 0.3ppts) said the next 12 months would be a ‘good time to invest’ in growing the business compared to 36.9% (down 0.7ppts) that said it would be a ‘bad time to invest’.

Michele Levine, CEO Roy Morgan Research, says the Turnbull Government will be looking for a ‘Budget Boost’ to Business Confidence in May which didn’t happen with Consumer Confidence:

“Business Confidence was up 2.8pts (+2.5%) in April to 116.6 following a similar sized increase in March driven by increasing confidence about the next 12 months for both businesses and the Australian economy at large.

“However, the first post-Budget ANZ-Roy Morgan Consumer Confidence released this week dropped 2.6% to 109.4 which suggests the Budget may not provide the boost to Business Confidence the Turnbull Government is after. This was the first time Consumer Confidence has dropped post-Budget since 2014.

“Business Confidence improved in five States in April with South Australia and New South Wales now having the highest Business Confidence on the mainland whereas the drop in Business Confidence in Victoria will be a concern to the Andrews Government.

“Industries with high Business Confidence are led by Transport, postal & warehousing, Accommodation & food services, Agriculture, forestry & fishing and Mining which has improved to its highest Business Confidence since mid-2016.

“A familiar list of industries continue to have lower Business Confidence including Electricity, gas, water & waste, Arts & recreational services and Manufacturing. In addition to the impending closure of the Australian automotive manufacturing later in 2017 – a topic that was comprehensively covered in the recent State of the Nation 27: Australian Automotive Industry presented in March, manufacturers are dealing with considerable concerns about the escalating price of Australian gas – a key input for many in the industry.”

Roy Morgan April Business Confidence results are based on 1,211 interviews with a cross-section of Australian businesses. Despite this month’s increase Business Confidence is still clearly below the 6yr average (116.4).

For comments or more information please contact:

Michele Levine
Chief Executive Officer
Office: +61 (3) 9224 5125
Mobile: 0411 129 093
askroymorgan@roymorgan.com