Roy Morgan Business Confidence up 2.3pts in January to 108.2 as prospect of interest rate cuts in 2025 increases
In January 2025, Roy Morgan Business Confidence was 108.2 (up 2.3pts from December 2024) as the prospects of interest rate cuts in the next few months increased. In late January the ABS released its inflation estimates for December 2024 showing official inflation dropping to an annual rate of 2.4%, below the mid-point of the RBA’s target range of 2-3%.
Following the increase in January Roy Morgan Business Confidence has now had a positive rating above 100 for four months in a row – the first time this has happened since the Albanese Government was elected in May 2022.
Businesses are confident about the year ahead with a rising plurality of 43.2% (up 2.7ppts) expecting ‘good times’ for the business over the next year compared to 15.1% (down 6ppts) that expect ‘bad times’ – a net positive rating of 28.6%, the highest net positive rating for three years since February 2022.
Businesses are also confident about the Australian economy’s performance over the next year with a clear majority of 58.6% expecting ‘good times’ for the economy compared to only 35.8% that expect ‘bad times’ – a net positive rating of 22.8%.
Business Confidence is just 2.1pts below the long-term average of 110.3, but a large 19.7pts higher than the latest ANZ-Roy Morgan Consumer Confidence of 86.7 for February 3-9, 2025.
Roy Morgan Monthly Business Confidence - Australia
Source: Roy Morgan Business Single Source, Dec 2010-Jan 2025. Average monthly sample over the last 12 months = 1,587.
Business Confidence is up significantly from a year ago driven by Victoria and NSW
Business Confidence for the month of January was up 2.3pts on a month ago (down 1pt) and up an impressive 15pts from January 2024. The increase in Business Confidence has been driven by significant increases in the three largest States of New South Wales, Victoria and Queensland.
The most significant increase was in Victoria, up by a stunning 25.6pts to 112.3 and this was joined by a large increase in New South Wales, up 16.3pts to 108.1, and a strong increase in Queensland, up by 8.7pts to 103.9, although now the lowest Business Confidence of any State.
There were also large increases in Tasmania, up a massive 35.4pts to 126.3, and now clearly the highest Business Confidence of any State, and an increase of 14.2pts to 114.7 in South Australia, now the highest Business Confidence of any mainland State.
The only exception to rising Business Confidence was in Western Australia with Business Confidence down 4.6pts on a year ago to 104.4. West Australians face a State Election in a few weeks on Saturday March 8 with the ALP Government led by Premier Roger Cook defending a massive majority of 23 seats and a two-party preferred result of 69.7% at the last State Election in 2021 held during the pandemic.
Business Confidence by State in January 2024 vs January 2025
Source: Roy Morgan Business Single Source, January 2024, n=1,609, January 2025, n=1,594. Base: Australian businesses.
Mining, Education & Training, Health care and social assistance and Arts & Recreational Services are the four most confident industries during December 2024 January 2025
Over the last two months there were 13 industries with Business Confidence in positive territory above the neutral level of 100 led by Mining, Education & Training, Health Care and Social Assistance, Arts & Recreational Services, Information Media & Telecommunications, Financial & Insurance Services, Rental, Hiring and Real Estate Services, Retail Trade, Construction, Public Administration & Safety, Professional, Scientific & Technical Services, Administrative & Support Services, Accommodation & Food Services.
There were two industries with confidence over 15pts above the average in December 2024 & January 2025 led by Mining on 142.3, up a massive 51.2pts on a year ago and Education & Training on 125.2, up 15.7pts on a year ago. Education & Training has now been amongst the top five most confident industries for over two-and-a-half years since June 2022.
Filling out the top five most confident industries are Health Care & Social Assistance, up 6.2pts on a year ago, Arts & Recreational Services, up 19.4pts on a year and Information Media & Telecommunications, up 21.5pts on a year ago.
Other confident industries during December 2024 & January 2025 included Financial & Insurance Services on 117.3, Rental, Hiring & Real Estate Services on 116.0, Retail trade on 114.7 during the most important retailing period of the year with the Christmas and New Year sales period, Construction on 112.6, Public Administration & Safety on 111.7, Professional, Scientific & Technical Services on 104.7, Administrative & Support Services on 104.3 and Accommodation & Food Services on 100.1.
The least confident industry is Agriculture, Forestry & Fishing on only 84.3, and also the industry with the lowest average Business Confidence over the last two years of only 81.7. The industry with the second lowest Business Confidence is Electricity, gas, water & waste services on 92.2 and the lowest average Business Confidence since the beginning of 2022 of only 84.
Other industries with low Business Confidence include Transport, Postal & Warehousing on 94.1, Manufacturing on 94.4 and Wholesale trade on 96.5.
Business Confidence for Top 5 and Bottom 5 Industries in December 2024 & January 2025
Source: Roy Morgan Business Single Source, December 2024 & January 2025, n=3,127. Base: Australian businesses.
Note: In the chart above, green bars represent Business Confidence in positive territory above the national average, red bars represent Business Confidence well below the national average and below the neutral level of 100 while the dark blue bar represents Business Confidence above the neutral level of 100 but still below the national average.
Business Confidence increased 2.3pts to 108.2 in January as concerns about the performance of the Australian economy receded and businesses grew more confident about their own prospects:
- In January, under a third of businesses, 31.9% (down 1.9ppts), said their business is ‘better off’ financially than this time a year ago, while 31.1% (down 2.4ppts), said the business is ‘worse off’ (the lowest figure for this indicator for three years since February 2022);
- Businesses’ views on their prospects for the next year improved in January with 43.7% (up 3.2ppts) expecting the business will be ‘better off’ financially this time next year, while only 15.1% (down 6ppts), expect the business will be ‘worse off’ (the lowest figure for this indicator since October 2021);
- Confidence regarding the performance of the Australian economy over the next year was virtually unchanged with a majority of 58.6% (down 1.1ppts), expecting ‘good times’ while only 35.8% (down 1.8ppts) expect ‘bad times’ (the lowest figure for this indicator for three years since February 2022);
- In addition, businesses’ views on the long-term future of the Australian economy over the next five years were down slightly with 34.5% (down 2.3ppts) expecting ‘good times’ over the next five years compared to a majority of 53.7% (down 0.5ppts) expecting ‘bad times’ (the lowest figure for this indicator for two years since January 2023);
- Net sentiment on whether now is a ‘good or bad time to invest in growing the business’improved in January with 43.2% (up 0.4ppts) saying the next 12 months will be a ‘good time to invest’ in growing the business and 35.2% (down 2.5ppts) who say the next 12 months will be a ‘bad time to invest’.
Michele Levine, CEO of Roy Morgan, says Business Confidence increased 2.3pts in January to 108.2, and the first time the index has been in positive territory for four straight months since the Albanese Government was elected in May 2022:
“Roy Morgan Business Confidence was up 2.3pts to 108.2 in January and is now at its highest since the election of the incumbent Albanese Government in May 2022.
“Businesses are growing more confident with an increasing share of businesses, 43.7% (up 3.2ppts), now saying they will be ‘better off’ financially this time next year compared to only 15.1% (down 6ppts) that say they will be ‘worse off’ – a net positive rating of 28.6% points – the highest since February 2022.
“In addition, a clear majority of 58.6% of businesses expect ‘good times’ for the Australian economy over the next 12 months. There is good reason to suspect that the increasing confidence about the next year is due to likelihood the Reserve Bank will soon start cutting interest rates.
“The latest official ABS inflation estimates released in late January showed annual inflation at only 2.4% – the lowest rate of inflation for three years since the March Quarter 2021 (1.1%). The closely watched ‘trimmed mean’ measure of inflation – which strips out volatile items such as food, energy and electricity – dropped to 3.2%, and a quarterly rate of only 0.5%.
“The latest ABS inflation estimates are within range of the Reserve Bank’s target range of 2-3% over the economic cycle and have many media commentators and economists predicting that interest rates will be cut at the Reserve Bank’s interest rate meeting next week for the first time since November 2020.
“On a State-by-State basis Business Confidence is in positive territory in all six States led by the two smallest States of Tasmania (126.3) and South Australia (114.7). Business Confidence is also positive in Victoria (112.3), New South Wales (108.1), Western Australia (104.4) and Queensland (103.9).
“At an industry level, it is Mining which is clearly the most confident industry on 142.3 ahead of Education & Training on 125.2. Education & Training has now been amongst the top five most confident industries for over two-and-a-half years since June 2022.
“At the other end of the scale is Agriculture, Forestry & Fishing on only 84.3 and the lowest average Business Confidence over the last two years of only 81.7. Other industries with low Business Confidence include Electricity, gas, water & waste services on 92.2 and Transport, Postal & Warehousing on 94.1 and has been the least confident industry over the last year averaging only 75.8.”
The latest Roy Morgan Business Confidence results for December are based on 1,594 detailed interviews with a cross-section of Australian businesses from each State and Territory. Detailed findings are available to purchase on a monthly or annual subscription as part of the Roy Morgan Business Confidence Report.
For comments or more information please contact:
Michele Levine
CEO, Roy Morgan
Office: +61 (3) 9224 5215
Mobile: 0411 129 093
To learn more about Roy Morgan’s Business Confidence, Consumer Confidence and Inflation Expectations data call (+61) (3) 9224 5309 or email askroymorgan@roymorgan.com.
About Roy Morgan
Roy Morgan is Australia’s largest independent Australian research company, with offices in each state, as well as in the U.S. and U.K. A full-service research organisation, Roy Morgan has over 80 years’ experience collecting objective, independent information on consumers.
Margin of Error
The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.
| Sample Size | Percentage Estimate |
| 40% – 60% | 25% or 75% | 10% or 90% | 5% or 95% | |
| 1,000 | ±3.0 | ±2.7 | ±1.9 | ±1.3 |
| 5,000 | ±1.4 | ±1.2 | ±0.8 | ±0.6 |
| 7,500 | ±1.1 | ±1.0 | ±0.7 | ±0.5 |
| 10,000 | ±1.0 | ±0.9 | ±0.6 | ±0.4 |
| 20,000 | ±0.7 | ±0.6 | ±0.4 | ±0.3 |
| 50,000 | ±0.4 | ±0.4 | ±0.3 | ±0.2 |
