Friday, May 10th, 2013 - Roy Morgan Research

Australian businesses - even those in Western Australia - are feeling under increasing pressure, with the result that overall Business Confidence has declined by 2.9 points in April 2013. 

Roy Morgan Research’s Business Confidence survey shows that overall Business Confidence declined by 2.9 points in April 2013 to reach 120.0, down further from the recent peak of 123.8 reached in February this year. The decline confirms that Australian businesses are under increasing pressure, even in Western Australia. These results are from 2,793 interviews with business decision-makers across Australia during April 2013.

The decline in Business Confidence is due in large part to a decline in the number of businesses reporting they were ‘better off than last year’, which fell from 27% of businesses to 24%, and in the proportion of businesses reporting the next 12 months as a good time to invest, which fell from 58% to 55%. The proportion of businesses expecting to be better off next year also fell from 38% to 36%.

Western Australia, in particular, has reduced its lead in Business Confidence over other states from more than 5 points (above NSW) in March, to only 1.2 points in April (126.6 in WA; NSW 125.4). The Finance (140.1, down 4.5 points), Manufacturing (108.4, down 3.6 points), Transport (116.9, down 3.6 points), Administration Services (115.2, down 5 points) and Personal Services (113.1, down 5.6) all contributed to the overall decline in Business Confidence during April.

These Business Confidence results also align with the fall in Consumer Confidence in April; falling 4.9 points to 118.9 in the week to April 27/28. This has fallen further in the first week of May to 113.6 (survey conducted May 4/5 2013).

Source:Roy Morgan Business Single Source (Australia), average monthly sample n =2,136.

Nigel Smith, Director of Business Research, Roy Morgan Research, says:

“Following the RBA’s 0.25 basis point cut to the cash rate in December 2012, Roy Morgan’s Business Confidence measures showed increases to a high point in February 2013. This week’s additional cut in interest rates of 0.25 basis points clearly seeks to rekindle the momentum in the economy that businesses reported after the December rate cut. However even if the same boost to Business Confidence achieved over the Christmas period can be repeated, it is likely to disappear as quickly as the December effect did, given current economic conditions.

“Cutting interest rates can only boost Business Confidence to the extent that it improves economic activity – which in turn depends on how much of the interest rate cut is passed on to mortgage holders and business borrowers by their banks. The short lived impact of the December rate cut suggests the banks will need to pass this entire cut on to all of their customers to improve Business Confidence.”

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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


Business Confidence, boost to business, Australian businesses



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