Friday, August 10th, 2012 - Roy Morgan Research
Business Confidence in Australia in July 2012 rose to 109.6, up from 105.4 in June 2012. This follows two months of declines and gives some optimism to the possibility that Business Confidence may have bottomed out in June. These are the latest findings from the Roy Morgan Research Business Confidence Survey conducted among a representative sample of 2,524 businesses across Australia in July 2012.
It appears that despite continued global economic uncertainty (particularly in Europe) and local issues such as the carbon tax, consumers reluctance to spend and the high Australian Dollar, there are a number of positive factors that appear to be impacting on business confidence. During July the Australian share market rose over 4%, Consumer Confidence improved, the ECB announced that it was “ready to do whatever it takes to preserve the Euro” and the RBA Governor Glenn Stevens gave a rather upbeat assessment of the Australian economy. In addition, the recent Greek election result helped calm fears in Europe and the reduction in the cash rate of 50 bps in May and 25 bps in June have also helped improve business sentiment.

Roy Morgan Business Confidence Rating

Source: Roy Morgan Business Survey, Dec10 – Jul12, Average monthly sample n=1,821.

The two components of the Business Confidence Index that have had the greatest positive impact have been the increase in the belief that Australia will be facing “good times” financially over the next 12 months and over the longer term (next 5 years). This increased optimism regarding the future economic prospects for Australia has lead to a marginal increase in the proportion of businesses who now think that the next 12 months would be a good time to invest in growing the business. Despite this improvement, only 51% think that it will be a good time to invest in the business over the next 12 months (up from 49% in June), which is only just positive and close to historically low levels.

Western Australian businesses remain the most positive (115.5) but since January 2012 they have shown a drop in confidence (down 12.7 points) which is more than the Aust average decline of 10.2 points. Other big declines in confidence since January have been seen in Victoria (down 16.2 points) and NSW (down 12.2 points). Tasmania clearly remains the most negative state despite a small improvement in July.

The most positive industries are “Education and Training” (129.0), “Information, Media and Telecommunications” (124.3) and “Mining” (122.0). In January “Mining” was the most confident industry but it has slipped back to be in third place currently. The global economic situation, declining commodity prices and tax changes appear to have put a dent in the confidence of the mining industry. The least confident industries currently are “Transport, postal and warehousing” (96.7), “Construction” (97.2), “Agriculture” (99.3) and “Manufacturing” (101.3).

Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“The small recovery in business confidence in July provides some optimism that we have passed the worst but the situation remains fairly fragile given the uncertain global economic outlook. The ultimate impact of any reductions in interest rates on economic activity will be influenced by the willingness of business to borrow and banks to lend, as well as the extent to which any reduction in official rates are passed on.”

About Roy Morgan Business Single Source Survey:

The Roy Morgan Research Business Survey began in May 2010 and currently conducts more than 2,000 interviews per month to measure Business Confidence. Around 1,100 of these interviews also cover all aspects of Business Finance with the remainder covering Telecommunications.

The latest Business Confidence Reports provide full analysis by major industry sectors, size of business and location.

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Roy Morgan Research

Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience in collecting objective, independent information on consumers.

In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.
Alex Dalidakis
P: +61 3 9224 5209


Roy Morgan Research Business Confidence Survey



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