This increase in confidence is due largely to the fact that more businesses now consider that economic conditions in Australia over the next twelve months will improve. These are the latest findings from the Roy Morgan Research ‘Business Confidence’ survey of over 2,700 businesses in January 2013.
Although most Industries showed improved confidence in January, it was mining that increased the most and so returning it to the position as the most confident industry. Western Australia has obviously benefited by this and is now clearly the most confident state. A number of key sectors all remain below the average confidence level and as such pose a major problem for economic recovery. The Agricultural sector has the lowest confidence rating, followed by Construction, Manufacturing and Retail.
With Business Confidence improving, the majority now consider that the next 12 months will be a good time to invest in their business (57%). This is the highest level since December 2011.
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“The increase in Business Confidence in January is the result of a number of positive factors simultaneously impacting on the business outlook.
“During December there was a great deal of coverage of the USA approaching the ‘fiscal cliff’, and this with issue having at least some resolution by the end of December, it would have been a major factor in the improvement in sentiment in January.
“Other factors contributing to a positive outlook in January included more optimistic growth prospects for China and the associated improvement in commodity prices, less concern about the European economic crisis, continuous upward trend in the ASX and reduced interest rates.
“Despite the current positive outlook it remains to be seen whether this trend can be sustained as the market is likely to react very quickly to any negative news either overseas or during the current reporting season.”
Source: Roy Morgan Business Survey (Australia), December 2010 – January 2013 (average monthly sample size n = 2,057).
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